Retired judge may chair “defence fund”

A retired judge or former Financial Ombudsman Services (FOS) or Australian Securities and Investments Commission (ASIC) executive might be invited to chair a member legal defence fund to be established by the Association of Independently Owned Financial Professionals (AIOFP).

AIOFP chairman and group managing director of dealer group Beacon, Peter Daly, said he believed such an appointment would help allay perceptions that the AIOFP's establishment of the defence fund represented some sort of a challenge to the role of ASIC or FOS.

He said the establishment of the fund had to be seen in the context of there having been a number of product failures since the global financial crisis and that, generally, neither product manufactures nor research houses appeared to have been held accountable.

"Often the blame falls on the shoulders of advisers and in many respects we perceive an approach of guilty until proven innocent existing," Daly said. "We fear enhanced powers of FOS and increased ASIC activity may exacerbate the problem and hence we are resorting to the establishment of a ‘member legal assistance defence fund' to provide support in genuine cases."

He said the objective was not to attack either ASIC or FOS, but to assist in defending members "where we believe there is a genuine case".

"The fund will be managed by a trustee and I propose inviting a retired judge, ex FOS or ASIC executive to chair the trustee and fund," Daly said.