Don’t make us pay compensation for others’ failures – FSC
Members of the Financial Services Council (FSC) should not have to help underwrite a last resort compensation scheme in circumstances where they already stand behind their advisers and compensate clients when things go wrong.
A public hearing of the Senate Economics Committee inquiry into consumer protection in the banking, insurance and financial sector has been told by the FSC that its members do not believe they should be required to stand behind the poor advice of advisers they do not employ.
FSC senior policy adviser, Blake Briggs told South Australian Senator, Nick Xenophon that for the members the FSC covered, “we can say that they are well run institutions where their advisers clearly met a higher standard and the institution stood behind the advisers. When the advisers made mistakes or did the wrong thing, the institutions stood behind the advice that was given”.
He said he believed what Senator Xenophon was asking was: “can the costs of their [other adviser’s] poor advice be transferred onto other institutions that have higher standards for the advisers that they recruit?”
“Our guys go out, train their advisers better, stand behind the advice they give, and, if something goes wrong, cover it,” Briggs said. “They also have better ongoing systems and they have better adherence to the best duty in FOFA [Future of Financial Advice].”
“What you are now asking is: would we also stand behind the advisers that we do not employ?” he told the Senator.
Recommended for you
A former Northern Territory financial adviser has received a seven-year ban from ASIC, having been convicted of supplying dangerous drugs and receiving or possessing the proceeds of their sale.
Both Bain Capital and CC Capital have made revised bids for Insignia Financial after completing a period of due diligence.
The advice industry has reached triple-digit gains for the calendar year to date, with two licensees seeing gains of five during the week.
Targeting market leadership in digital advice, Bravura’s digital solutions are now available to over 6 million superannuation fund members.
