Extend reference checking to management and boards says FPA

People providing general advice or in management and board positions should be subject to just the same reference checking as financial advisers, according to the Financial Planning Association (FPA).

The FPA has used a submission to the Australian Securities and Investments Commission (ASIC) to argue that “unprofessional and unethical participants in the financial planning profession can continue to influence detrimental consumer outcomes by being allowed to move into management roles”.

It said this could be allowed to happen without appropriate and mandatory reference checks being conducted.

“For this reason, we continue to recommend that ASIC extend the law to directors, management and responsible managers, and not just advice providers,” it said.

VIEW ALL

View all

"Additionally, the FPA has been a strong supporter of the central referee register maintained by the Australian Bankers Association (ABA) and is confused as to why ASIC would not just create a central register,” the FPA chief executive, Dante De Gori said.

He said the process being proposed by ASIC was laborious because it required the new licensee to manually search through multiple web pages as part of the reference checking process.

“It’s an inefficient regulation of a critical consumer protection policy,” De Gori said.

The FPA is looking to the ABA reference checking model arguing that a single register of designated referee details as opposed to individual referee contact details dispersed between licensee websites.

It has also formally recommended an extension of the ASIC reference checking protocol to other individuals supporting financial planners including directors, management and responsible management roles.