Michael Miller (left) and Joel Ronchi

Cleaning up the financial advice industry has led to far greater scrutiny of the advice being offered by financial advisers.

In fact, the Financial Services and Credit Panel has issued 13 determinations since May 2023, with more determinations expected to be announced this year.

Capitol Advisory director and financial adviser Michael Miller keeps a close watch on determinations. He believes that many of the decisions are the result of more stringent licensee reporting requirements to ASIC.

Previously an Australian financial services licensee may not have reported a breach because they considered it to be minor and of little individual impact, but the new breach reporting requirements have meant the reporting threshold is very low, he explains.

“Once these are reaching the FSCP, we’re seeing the panel apply either no or a minor sanction where they consider that the breach may have been more of an error than adviser misconduct,” he tells Professional Planner.

“When you consider the low reporting threshold and the low number of decisions, this suggests that overall conduct is very good.”

Some of the more recent decisions have looked at the involvement of cold calling marketing organisations generating leads that have turned into poor quality superannuation switching advice.

“These cases are often difficult to distinguish between whether the poor advice is because of the conduct of an individual adviser, or is more systemic in terms of how a particular practice is operating,” Miller says.

The FSCP is not able to make a finding or impose a sanction beyond the individual case it’s facing, but has shown a willingness to require an audit of future advice than can be helpful in providing the information ASIC may require to address poor conduct that is related to a practice’s business model.

He notes that nearly all of the decisions to date have been anonymised, however two decisions announced in December included the names of individual practitioners. “Sometimes a practitioner is named because a panel has chosen to do so, but there are circumstances when the panel rules require this to be done,” Miller says.