Associations march on Canberra

financial-services-reform/SOA/federal-government/

21 October 2003
| By Craig Phillips |

Pressureis mounting on the Federal Government to amend elements of the Financial Services Reform Act (FSRA) following the unprecedented pooling of industry lobbying power.

Five of the industry’s key financial advisory associations have thrown their weight behind approaching Government, arguing for it to amend the laws relating to statements of advice (SOA).

The matter was initially reported byMoney Managementback in August after revealing the Boutique Financial Planning Principals Group (BFPPG) had approached Parliamentary Secretary to the Treasurer Ian Campbell to amend the Act.

At the time, the BFPPG claimed the law favoured “large product distribution shops producing non-tailored, press-the-button advice” at the expense of small dealer and planning groups.

Since then, the BFPPG has enlisted the support of the other major industry associations - theFinancial Planning Association, the Financial Planners Federation of Australia, the Association of Independently Owned Financial Planners andCPA Australia.

“It takes people time to fully understand all the implications of the law, and that’s why it’s only now that there’s a growing awareness of the problems that are there,” BFPPG president Bruce Baker says.

Baker says in its existing form the Act exposes planners to criminal and civil liability in situations where they may not be at fault.

According to Baker, under existing law it is too easy to find an SOA technically defective, opening the adviser up to legal action.

“Even planners who are behaving ethically, honestly and are providing good advice can be thrown in jail or fined from a criminal offence angle,” Baker says.

However, Baker says planners should be more concerned with the civil liability issues arising from the legislation, as theAustralian Securities and Investments Commissionis less likely to use the Act in relation to finding planners criminally liable.

“Any time that the market takes a downturn, even when good advice is provided, we’re going to see a flood of law suits from vexatious clients,” Baker says.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 2 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

6 days 18 hours ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

1 week 4 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 2 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND