Members of the Association of Independently Owned Financial Professionals (AIOFP) have had enough of being targeted by heavy-handed regulators, and are uniting to make a stand.
Towards the end of last year the AIOFP voted to implement a trust much like that of the Australian police force. Members will contribute to a central trust fund, which will have a set of rules to protect advisers if they are unfairly treated by ASIC, APRA, FOS or any stakeholders in the market.
AIOFP executive director Peter Johnston said it was time to challenge the harsh determinations being handed down by regulators, but that this required “big wads of money”.
“We need a big brother. We need to say ‘we’ve got $2m in the bank; we’ve got legal advisers’…You don’t just take on one; you take on all of us.”
Johnston used the example of financial planners hit by the Trio fraud in 2009, which lost investors about $180m. He said the advisers were not to blame, but were consequently banned from financial planning on minor offences. Offences that otherwise would have received a ‘slap on the wrist’. Peter Seagrim of South Australia also fought his ban from financial planning, which was based on compliance concerns, and had it reduced from three years to six months.
“There are plenty of examples out there, of where advisers get attacked politically, plenty of examples of determinations given by FOS…the advisers are being harshly treated, and they should be challenged,” said Johnston.
“This is the message we want to get out there in the market place: that we are no longer isolated. We are now all together and if you unfairly, politically or commercially, attack one of our members, we have the resources now to fight back.”
The fund will be discussed further at a conference in Singapore next month.
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