1 Comment 1 Commentby Susan Edmunds
David Ireland, chairman of the current code committee and a financial services law expert, said there would be ramifications for those providing financial advice on this side of the Tasman, too.
“Whether you operate as part of a vertically integrated organisation, independently or somewhere in between.”
He said the full extent of that would not be known until the commission had finished its work but advisers could assume that expectations would increase in terms of compliance assurance processes from advice providers.
The Financial Markets Authority and Reserve Bank have already demanded information from the banks to quantify how they are acting to address the risk of misconduct here, too.
But PAA chief executive Rod Severn said there was an opportunity for independent advisers to differentiate themselves from the big providers.
"Right now, the focus of the commission is on the VIOs and not the individual. There is no doubt, however, that everyone will get some grief thanks to the poor practices of the large institutions that the commission has gone after.
"If anything, the 'independent' adviser should come through this in good shape if they can prove they are removed from this mess."
Wayne Smith, chief executive of the TripleA Advisers Association, which represents AMP advisers in New Zealand, said he expected the misconduct uncovered at AMP to be found in other large Australian entities.
AMP was found to be charging clients for advice they did not receive, and deliberately misleading the regulator. That led to the resignation of its chief executive, board chair and board members.
"What's of interest to me is the fact that the entities that seem to have been behaving poorly across the ditch are the big end of town, not the advisers per se off their own bat and certainly not the small, independent adviser firms," Smith said.
He said it was ironic that it was the small advice firms in New Zealand that were to bear the "disproportionate compliance brunt" of the code working group's proposals.
"That seems a little unbalanced given where the problems are arising from in Australia.
“I think those issues have got some way to run before we would see any impact on advisers here whether they work for AMP or anyone else.”
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Way to easy to point the finger at someone else while you continue to earn those commissions