Reprimands, warnings and a few adviser suspensions
Two years after it was established as the Single Disciplinary Body covering the financial planning profession, the Financial Services and Credit Panel (FSCP) has issued plenty of reprimands and warnings, but only a few suspensions.
The FSCP handed down its first decision on 30 May, 2023, and initiated its first suspension of an adviser’s registration six months later and it took nearly a year before a second registration suspension order was issued in November, last year.
The panel announced a further “registration prohibition” against an adviser in February this year.
The FSCP adjudications also point to instances where self-licensed financial advisers and some working for so-called “micro-licensees” were required to report issues to the Australian Securities and Investments Commission (ASIC),
At least two advisers were required to deal with ASIC on the basis of a retaining the services of an independent compliance professional.
In one such instance, the panel’s decision stated: “The relevant provider is required to provide the independent person’s findings as a result of their audit to ASIC, and the relevant provider must bear the cost of the work undertaken by the independent person under the written direction”
An examination of the FSCP’s adjudications points to financial advisers most often running into trouble when dealing with clients’ superannuation and non-concessional contributions in particular.
Despite outward perceptions of frequent financial adviser misconduct or failings, the FSCP has on average handled about 12 cases a year and in some instances has determined that no action was required.
The FSCP panels operate on the basis of an ASIC staff member and at least two of the 24 members appointed by the Treasury many of them experienced practicing advisers.
Guess the question has to be asked as to whether breach reporing regime is an efficient use of resources and money for, “12 cases a year and in some instances has determined that no action was required.” It didnt stop any of the major FP issues of recent times.
FSCP is not a single disciplinary body. It is one of many. These statistics only relate to disciplinary matters that went to FSCP. Plenty of other disciplinary action was taken by other disciplinary bodies.
Most of Hayne’s recommendations resulted in extra cost and complexity and duplication. His one recommendation that would have reduced cost and complexity and duplication was a single disciplinary body. The government chose not to implement it. Instead they created an extra disciplinary body and named it “Single Disciplinary Body”, without getting rid of any of the other disciplinary bodies. It was lazy and cynical and totally defeated the purpose!
This is one of the many problems Labor should have been fixing in the second year of its previous term, after implementing QAR in the first year. Instead, here we are in Labor’s 4th year with QAR still not implemented, and none of the other urgent reforms even started.
Remind me again as to how many different institutions can give an adviser an involuntary colonoscopy?