FICS under fire
The Financial Industry Complaints Service (FICS) has undertaken to respond to concerted criticism from within and without the financial services industry last month over its performance and the extent of its brief.
The separate criticisms were levelled at FICS by the Boutique Financial Planners Principals Group (BFPPG), the Association of Independently Owned Financial Planners (AIOFP), and an investor disgruntled over its ruling on his complaint.
In turn, FICS has undertaken to formally respond by the end of September to the criticisms from the two organisations, both of which came in the form of written submissions to FICS, and, in the case of the AIOFP, to the Australian Securities and InvestmentsCommission (ASIC) as well.
FICS chief executive Alison Maynard chose to also publicly defend the scheme from some of the two bodies’ criticisms, as well as those of disgruntled investor Bill Clarke, in an interview with MoneyManagement last week.
Maynard said she considered the AIOFP submission as actually “supportive in the main” of FICS, and that the BFPPG had “put its submission to us as issues it wants to discuss, and we are always open to discussing issues of concern with our members”.
The BFPPG submitted a 22-page “statement of concern on FICS operation, accountability and ambition” that was prepared by its so-called Fix FICS Committee, effectively calling for an improvement in its published rulings and determinations.
NSW delegate on the BFPPG’s Fix FICS Committee Garry Olhsen told Money Management the multi-faceted submission hoped to address “major flaws we have with some of FICS’s determinations and operations”.
Also a director of Sydney-based boutique planning firm Profile Financial Services, Olhsen said FICS “may also be operating outside of its charter of operations from ASIC [on a number of issues]”.
The AIOFP’s submission, which also went to ASIC chairman Jeffrey Lucy, was primarily critical of FICS’s Rule 15, which effectively precludes it from jurisdiction over “fund manager incompetence and/or conduct”.
It also called on FICS and ASIC to assist it with its proposed submission to Treasury to modify Rule 15 to enable FICS to include fund manager conduct.
The AIOFP submission reflects the concerns of disgruntled investor Bill Clarke with FICS’s response to a complaint he made in relation to the Challenger Howard Penrith Homemaker Centre property fund — although it was not submitted to FICS in support of Clarke.
Clarke himself took the extraordinary step last month of issuing his own media release to criticise FICS’s decision to exclude itself from ruling on his complaint against Challenger on the basis of Rule 15.
Clarke, who had used an AIOFP planner to buy into the Challenger fund, said in his media release that Rule 15 “simply allows FICS to have an escape clause for every submission made to it”.
He based his complaint to FICS on the basis that Challenger had “promoted the [Penrith Homemaker] Centre in its prospectus as a five to six year term and then dumped it in three years”.
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.