SPAA agrees with ASIC’s “bad apple” solution, but not the sentiment

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The SMSF Professionals Association of Australia (SPAA) has supported measures proposed by ASIC to counter “bad apples” in the industry, but not the sentiment that the problem is widespread.

Jordan George, senior manager, technical and policy for SPAA, told Wealth Professional that ASIC’s call for mandated reference checking made sense.

“One of the things we like about the suggestion of references is it would stop advisers that have possibly contravened the law from being able to transfer from one licensee to another and avoid detection,” he said.

But George denied that the industry has a “widespread” problem with bad apples as indicated in ASIC’s submission to the Financial Services Inquiry (FSI).

Lifting standards and education across the whole industry is far more helpful than just focusing on the supposed negative perception of advisers, he said.

“We don’t have a widespread problem - it’s a small minority. We believe [bad apples] need to be stopped, but it’s not a broader problem and we don’t agree with any sentiment that it is.”

SPAA are also partially supportive of ASIC’s call for the introduction of a national examination for financial advisers, but they don’t believe it should apply to everyone.

George said the idea was positive in that it would ensure a baseline level of competency, but it shouldn’t be mandatory for those advisers who have already achieved this.

“We would expect ASIC to give people acknowledgement that they have achieved competency through their associations,” he said. “A good example is the SMSF auditor regulation that gave people credit for having undertaken CPD. These were grandfathered, and we think a similar approach to financial advice should be warranted.”

SPAA has also urged the regulator to re-look at the proposed rewrite of the RG146 and introduce a specific SMSF competency within it.

This would be a major way to lift the quality and standards of advisers and reward those who are already doing the right thing, George said.

“ASIC had been critical in the past about SMSF [regulations] so we were surprised they then didn’t have a specific competency within RG146,” he said.

After a story appeared in Wealth Professional exploring ASIC’s FSI submission and its call to rid the industry of the “real and significant” problem of bad apples, many readers were outraged.

Unethical advisers were few and far between and were not representative of 99% of financial advisers, insisted a significant amount of readers.

The majority felt that continuing to undermine advisers in this way was hijacking the journey towards the professionalisation of the industry.


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