Don’t make us pay compensation for others’ failures – FSC

FSC/super-funds/financial-planning/funds/

3 May 2017
| By Mike |
image
image
expand image

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.

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 3 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 4 weeks ago

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

5 months ago

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

1 week 6 days ago

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

2 weeks 5 days ago

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

3 weeks 3 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND