FuturePlus and Chifley end dispute

Affiliated dealer groups FuturePlus and Chifley Financial Services have resolved an ongoing dispute with advisers by withdrawing a 12-page commercial agreement the latter feared would push the onus of professional indemnity cover onto them.

The Authorised Representative Agreement (ARA) was presented to planners in late February requesting their signature if they wished to remain with the groups. However, following ongoing discussions between the dealer groups and the Financial Services Union (FSU), it has been abandoned.

“The intention of the ARA was to identify, for authorised representatives, their obligations pursuant to their authorisations. [However] we believe that the ARA has been altered to a point where it is no longer of any benefit to either the licensed entities or staff,” the group’s general counsel Madeline Dermatossian says.

The ARA was based on a template developed by the Financial Planning Association and has been adopted by a number of other dealer groups.

Chifley and FuturePlus argued the ARA would protect them against any move by the Australian Securities and Investments Commission to revoke their licences in instances of planners acting in contravention to the Financial Services Reform Act (FSRA).

However, the FSU claimed the document did not relate exclusively to FSRA and would have given the dealer groups extensive power over advisers.

“Where the authorised representative performs their duties outside the head-office, the principal has the right to enter those premises with or without notice at anytime during business hours for any purpose whatsoever,” a copy of the proposed contract stated.

One other sticking point, according to one individual affected by the issue, is the fear the contract will replace adviser’s existing employment contracts and make it easier for their dealer group to release them at a future date.