The Australian Securities and Investments Commission is on track to release its latest shadow shopping report next year, with the regulator’s mystery shoppers focused on financial advisers who ‘churn’.
According to the Financial Planning Association’s general manager of policy and conduct Dante de Gori, who recently met with ASIC and several life companies to discuss the shadow shopping exercise, the regulator is working through the data and advice it has collected.
“The exercise is progressing and is in its second phase and it’s focused on replaced business but we won’t know anything until the second half of 2014,” he said.
As part of 15 recommendations handed down by the Parliamentary Joint Committee on Corporations and Financial Services, ASIC is required to conduct a shadow shopping survey on advice linked to the life insurance sector and report the findings within two years of the federal government’s Future of Financial Advice (FoFA) reforms implementation date.
The FoFA reforms were voluntary from July 1, 2012 and mandatory from July 1, 2013.
During an FPA roundtable on Wednesday, FPA chief executive Mark Rantall reaffirmed the Association’s commitment to working with ASIC in addition to its existing mandate to monitor the behaviour of its own members and take enforcement action where necessary.
The December issue of Financial Planning Magazine shows the FPA received five new complaints and finalised five investigations in the September 2013 quarter. It has nine ongoing investigations.
In the quarter, the FPA did not suspend, expel or terminate any members.
Rantall said the FPA received a number of enquiries from members and clients of practitioners, both members and non-members, around clarifying the professional obligations of advisers in terms of the flow of client information from a former adviser to a new adviser.
He pointed out that according to the FPA’s rules a member must take all reasonable steps, consistent with a client’s interests, to facilitate the orderly transfer of client’s business to another professional upon receipt of written advice from the client or another person authorised by the client.
