In a statement, the Stockbrokers and Financial Advisers Association (SAFAA) said the royal commission on misconduct in the financial services industry, announced by the Turnbull government last week, could result in “unnecessary regulation” of the stockbroking industry.
SAFAA chief executive Andrew Green said the stockbroking industry was already well-regulated, evidenced by the “miniscule number” of complaints about stockbrokers to the Financial Ombudsman Service.
“For the year ended June 2017, FOS received a total of 39,479 disputes. Of these, only 0.003 per cent related to stockbroking,” he said.
“That figure was achieved in the context of 100 million trades on Australian stock exchanges during the 2017 June quarter. That is more than 1.5 million trades every day. Out of all those trades, only eight complaints were found in favour of applicants for a whole year.”
Mr Green said “it would be a complete waste of time and taxpayers’ money” for the royal commission to focus on the stockbroking industry, adding that further regulation and “red tape” would risk existing firms being driven out of business.
“This will be a bad outcome for Australia,” he said.
Last week, FPA chief executive Dante de Gori told ifa that the royal commission should focus its investigation on areas of the financial services industry that have not already been examined.
Malcolm Turnbull and the Libs also opposed a Royal Commission, till last week.
I welcome a Royal Commission. Consumers need to regain confidence in financial advice and those who provide it. We need to raise financial adviser education standards, ensure the complete removal of commissions and separate advice from products. Only then will advice truly be in the clients’ best interests. I’ve elaborated further in a blog today, feel free to read: [url=http://https://www.hewison.com.au/hewison-insights/blog/vote-1-royal-commission ][/url]
‘Miniscule number’ hey? Is that because when you look at a brokers ‘buy’ list, then check the company has gone ‘cap-in-hand’ to raise funds because they truly ‘aren’t’ profitable at all, but need the backing of a ‘broker’ to help out. Or is it because when you see a ‘buy’ recommendation, then two years later it’s still a ‘buy’ but the price is either still the same or gone down significantly. ‘We said it was good value in 2015 – Now after 10 downgrades, it’s even better value’.
No need for accountability there??
relating the number of complaints to the number of trades on the ASX is hardly a good measure. One could argue the number complaints relating to financial service participants including advisers in regards to the number of dollars invested in managed funds, ASX products, and super funds would also be 0.003 percent
Each individual should have their own licence, whether they be financial planners or stockbrokers. hat would really clean up the industry
Non sequitur, but thanks for playing.
Good point Pete. Many advisers have said the risk of having their own AFSL is too great. Not a glowing endorsement on some.
This statement = leave us alone we like taking a fee for not documenting anything and telling people to churn their money through stocks rather than a long term buy and hold strategy
I left the stockbroking industry 15 years ago and my mates at “An american owned stockbroking firm” with a shop here tell me if they don’t make ( some might call it churn) $450,000 Commission each year , they are shown the door !!! No complaints ? staff are too scared! Also this one page crap of fact find and risk profiler , very Ltd SOA as most were treated as Sophisticated investors ? Oh lets not forget commission are fine in this land ie 1% placement fee for new IPO ‘s , no conflict here ? …… just to name a few , I could go on but it makes me sick ….