The Financial Planning Association of Australia The Financial Planning Association of Australia

FPA acknowledges findings of ASIC report into how large institutions oversee financial advisers


The Financial Planning Association of Australia (FPA) acknowledges the findings of ASIC’s review into how Australia’s largest financial advice firms have dealt with poor advice and non-compliant financial advisers in the past.

ASIC Report 515 ‘Financial advice: Review of how large institutions oversee their advisers’ concludes that while Australia’s big banks have improved their systems and culture, there is further work to be done to improve practices.

Commenting on the report, Dante De Gori CFP®, CEO of the FPA, said, “The review indicates a lot of work has been done by the major financial advice institutions to improve their practices – but clearly there’s more to be done to ensure consumer trust and confidence is well placed.

“The review highlights repeated failures by the big banks to notify ASIC about breaches of conduct, delays in reporting problems and inadequate background checking and information sharing within the industry.

Both large and small financial advice firms must have internal processes in place that support the core values of putting the customer first. If breaches do occur, firms must act quickly to provide a response in the interests of their customers.

“Complying with the code of professional practice is a way to ensure you comply with the law. It can also be used by licensees to improve advice and improve the audit process.

“The finding that there are inadequate background and reference-checking processes in place is disappointing, but not surprising. Consumers need to trust that they only consult with professional financial planners, and poor reference checking is a significant concern.

“We encourage all licensees/employers to follow the FPA’s reference checking requirements in the code (including the reference checking consent form), when considering employing or authorising a representative who purports to be a member of the FPA or a former member of the FPA. The facility involves checking that the person is in fact a member of the FPA and that all information regarding any current complaints and any past disciplinary proceedings is provided.

“The FPA knows from experience that many licensees/employers do not have a process for checking with the FPA for names of financial planners that have had disciplinary actions against them, so we strongly advocate the use of the facility.

“As the regulator, ASIC plays a critical role in consumer protection and we support the findings of the report. We continue to work proactively with the Government and industry to raise standards of financial advice for Australian consumers.”