In its submission to Treasury’s review of AFCA, the FPA stated that while it was generally supportive of the use of experts by the ombudsman in cases where it was tricky to come to a determination, it had received feedback from members that some of those being used may not be sufficiently qualified.
“AFCA as part of their operational guidelines may in certain cases obtain external experts to provide additional information or reports where their internal expertise is insufficient to fairly make a determination in the case,” the association said.
“The FPA is very supportive of this process. However, the FPA is aware of AFCA making use of ‘experts’ who are generally less qualified and have less industry experience than the financial planner in the firm they are handling a complaint on.”
According to AFCA operational guidelines, the ombudsman is able to compel a financial firm to pay for expenses of up to $5,000 to engage an expert appointed by AFCA to further investigate complaints, in cases where the firm has not provided enough information or where it is otherwise unable to decide on the outcome of a case.
“When deciding whether to appoint a particular person to provide expert advice, we will consider whether that person is an expert in the matter on which advice is to be provided, taking into account, in particular: their training and experience, and whether it is recent and relevant; their independence; [and] whether they are recognised as an expert in the matter,” the guidelines stated.
More complex complaints can also be decided by a panel including independent experts as well as ombudsmen, the guidelines stated.
In its submission, the FPA said it was aware of experts being engaged by AFCA that did not hold appropriate current industry qualifications, and may not have had sufficient broad work experience across the industry to be deciding upon advice cases.
“For example we are aware of the use of experts who have only ever operated in a single firm for significant periods of time – and therefore have no broad experience of best practice across the profession – or have only minimum diploma level subject qualifications – as opposed to even a complete diploma, but more appropriately degree or professional certification level qualifications – engaged to provide ‘expert’ reports on financial planners with significantly more experience and professional level qualifications,” the association said.
“To ensure that the profession has faith in the AFCA determination process, it is imperative that AFCA only engage experts with broad industry experience and the highest professional and ethical qualifications.”
The FPA recommended that AFCA’s operational guidelines be changed to specify that “only external experts of significant and broad industry expertise, and professional level qualifications are obtained to provide expert reports as part of the complaints hearing process”.
Reading between the lines it sounds like AFCA is paying failed, disgruntled, former advisers to take revenge on the industry they left. AFCA seems to be a lot more biased and unprofessional than COSL or FOS ever were. Another failed “regulatory reform”.
It always puzzled me how and why people from AFCA and indeed ASIC itself can judge and ban a Financial Planner when AFCA and ASIC staff involved are I assume not currently on the Adviser Register, do not hold current qualifications, and have not passed the be all and end all FASEA exam.
Like you should even have to state this?
Is AFCA really that poorly directed?
If we ran an AFSL without fit for purpose staffing AFCA would be all over us.
Why should AFCA not operate at the standard that it demands of the parties it oversees?
Dear FPA…keep your mouth shut… your conflicts of interest, payments from large insto’s like AMP and AwareSuper, your conduct exposed at the Royal Commission, the deal you did with CBA where I got FASEA’d….actual do more harm than good. Please just stick to organizing a Golf Day in Melbourne, selling conferences, charging Uni’s accreditation fees for your CFP course . When your really serious about representing advisers and being some type of industry association then come back to me. Until then, you’re just seen as a body representing AMP et al… so shut the ^%^%$ up plz..
I have a real problem with AFCA.
I have made a complaint against AMP Bank.
After 18 month, AFCA made a decision based on 1/2 the evidence and ignoring 1/2 the facts.
Useless is an understatement.
What a revelation….FPA actually doing something!!!
Now I understand why they are paying their CEO “the big bucks”…
Experts are only one factor to be considered if good money is being paid on a case that is not at fault yet. The ‘expert’ should not just be a lawyer or ex Industry Fund related CEO/Director. It rightly needs to be somebody who has experience in Financial Service most likely in a compliance related field as an independent contractor. The fault with using a lawyer who is a FS expert, is they would in most cases be biased in being used to taking firms to task. A balanced view is required in cases like this. Not more fuel on the fire. It is not different that a insurance company unable to make a claim decision who consults a property independent expert MD to make a final decision.
Is this because Neil Kendall is missing out on his fee…EX FPA chair who runs a firm that chases bad advisers whilst also being an “Expert” for ASIC…
A single firm adviser could well be qualified if they were able to choose a good licensee from the start and therefore being well-versed in practice. Degree qualifications are often worth less than the paper – the right kind of industry experience could qualify an adviser to be an expert. Do we really want to be judged by academics? Perhaps only PhDs could qualify as expert witnesses???