Planners pin-pointed by FOS at Royal Commission


The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry has been told that financial planners account for more than a third of serious misconduct identified by the Financial Ombudsman Service (FOS) since early 2012.
In a submission responding to questions from the Royal Commission, the FOS acknowledged that credit issues made up by far the most complaints it dealt with in a year, but pointed to the fact that financial planners/advisers accounted for the majority of serious misconduct investigations.
Pointing to its activities since 2009/10, the FOS submission said eight in ten (81 per cent) of all serious misconduct issues related to investments and failures to pay a FOS determination.
“Financial advisors/planners account for more than one-third (39 per cent) of serious misconduct issues we have identified since early 2012,” it said.
Discussing unpaid determinations, the FOS also pointed to financial planning providers as being an issue.
“While the issue involves only a minority of our members who provide financial advice, the level of unpaid determinations at the end of December 2017 was almost one-quarter (24 per cent) of all determinations made in our investments and advice jurisdiction,” the submission said.
“Financial advisors/planners were involved in more than half (55 per cent) of all of these unpaid determinations, followed by operators of managed investments schemes (13 per cent) and credit providers (10 per cent).”
Recommended for you
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
New Zealand’s financial regulator is following the footsteps of its Tasman neighbours and proposing to conduct a review on improving the accessibility of financial advice and advice business models.