IFA applies shame factor
For the first time the Institute of Financial Advisers (IFA) has named advisers found guilty by the organisation's disciplinary committee. INLCUDES links to decisions
Wednesday, May 13th 2009, 6:40AM
by David Chaplin
In judgements made public yesterday, IFA members Craig Lunn of Feldwick Financial Services, Invercargill and Bruce Ryder of Korimako Insurance Services, Dunedin were named after being pleading guilty to serious breaches of the body's 'Code of ethics and professional conduct' - principally due to finance company investments.
As well as being publicly censured, Lunn and Ryder were fined $37,000 and $30,000 respectively to recover the costs of the disciplinary procedures.
In the rulings the IFA disciplinary committee also said both advisers were "not to provide professional financial planning or investment advice for as long as he is a member of the Institute unless he has obtained and proves to the Institute the relevant qualification as per the Institute's or statutory requirements".
While Lunn and Ryder are still registered members of the IFA it is understood they are in the process of resigning from the industry body. In their defence statements both advisers contested the IFA's jurisdiction on the grounds they had not paid annual fees and were therefore "non financial" members.
Lyn McMorran, IFA president, said while the IFA has not named disciplinary offenders in the past "it has always been an option".
"It's a severe option because it can affect the livelihood of advisers," McMorran said. "In these cases the disciplinary committee must have found the offences severe."
She said since Tony Frankham, high profile company director and former president of the Institute of Chartered Accountants, joined as chair of the IFA disciplinary committee late last year the process has been redesigned in line with other professional bodies.
According to McMorran, the IFA disciplinary committee sits at arms-length from the organisation's management and board.
"The board has no influence on [the disciplinary committee's] decisions," she said.
In another release yesterday, the IFA said some members had expressed concern about how an upheld complaint in the disciplinary process would affect a civil negligance claim.
"We don't have any authority to determine whether the member upheld the law nor to establish whether they have been negligent," the IFA statement said.
However, McMorran admitted it was likely a guilty finding by the IFA disciplinary could "form the basis of a civil claim".
Full decisions can be read here
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