Please explain: FPA seeks answers over ASIC comments?

A “taken aback” chief executive of the Financial Planning Association (FPA), Kerrie Kelly, has requested the chair of the Australian Securities and Investments Commission (ASIC) take action against one of his senior staffers for publicly brandishing financial planners as untrustworthy.

ASIC assistant director of compliance Sharman Grant’s statements, reported in Money Management two weeks ago, which included the comment that she did not have a financial planner “because I just don’t trust them”, have prompted the FPA to call for an official explanation.

In a letter to ASIC chair Jeff Lucy last week, Kelly demanded the corporate regulator investigate the matter and take appropriate action.

Later writing to Money Management to say she had been “taken aback” by Grant’s comments, Kelly said: “Given the sweeping generalisations of Ms Grant’s comments, the outrage of FPA members is understandable. Ms Grant has slurred the integrity of all advisers, including FPA members. Such action is inappropriate by a senior ASIC officer, and illustrates both a total lack of objectivity and a bias against those whom she is employed to supervise.”

ASIC declined to comment when asked if it was planning to take any action over the matter. But Money Management understands that Grant, who had been scheduled to give a speech at the FPA’s annual conference in November, has been taken off the speakers list by ASIC.

In her letter to Lucy, Kelly said she was also angered by the comments made by Grant that ASIC had recently met to discuss the structure of the financial planning industry, and whether ownership of advisers by product providers was a workable model.

“Financial planners who are FPA members and professionals in their own right are also individuals. To suggest they are ‘owned’ by a corporation is a poorly informed accusation,” Kelly wrote in her letter to Money Management.

Planners who contacted Money Management over the comments were also concerned that Grant’s outburst went further than the personal views of one ASIC officer.

“Until proven otherwise, we can only assume that Grant’s comments are reflective of the atmosphere of the organisation she works for,” Godfrey Pembroke adviser Peter O’Toole said.

The Federal Opposition also weighed into the ruckus, with Labor spokesperson for financial services Senator Nick Sherry describing Grant’s comments as “an unfortunate generalisation”.

“I’m a little bit surprised with the sweeping nature of the criticism that Grant has made,” he said.

“But what I do think it does is highlight that the industry and particularly financial planners still have to deal with issues around what are conflicts of interest, and the major issue of whether or not commission-based selling is appropriate.”

See letters page 14-15, editorial page 16