Industry heads have urged ASIC to establish a public breach register so consumers and dealer groups can view the names of financial advisers who have seriously breached quality advice standards and who may still be practising.
Dealer group Millennium3 joint managing director Darryl Foster said a public breach register would not only enable consumers and dealer groups to know more about the advisers they were dealing with, but it would also be a step forward in weeding out some of the industry's less reputable advisers.
"Dealer groups can ask new advisers for their past compliance reports. However, regardless of what these reports show, some dealer groups will still appoint advisers who have a history of serious breaches that have resulted in inappropriate advice," Foster said.
"Sadly, there are dealer groups that are more focused on scale and dealer fees than they are on hiring advisers with an unscrupulous history."
Foster said there were advisers who had committed a high number of serious breaches and had been ejected from one dealer group just to find a contract with another.
FPA chief executive Jo-Anne Bloch said the FPA would support a public breach register as it would allow consumers to make an informed decision about their adviser.
"The FPA has long campaigned for ASIC to improve its publicly available register so that consumers know that their financial planner is licensed, whether they are a member of a professional body, what sanctions may have been applied by ASIC or the professional body, and what type of financial advice they are licensed to provide," Bloch said.
"The register is not a silver bullet and it certainly depends on what is on the register as to how helpful it could be. But it could go some way to helping consumers understand who their financial planner is and what they are authorised to do, and whether there are any actions that have been taken against that planner in the past."
Association of Financial Advisers chief executive Richard Klipin said it was important consumers were confident in the advice profession and that the industry was not tarnished any further by the small number of bad eggs in the profession.
"It is important that those few advisers are weeded out so they cannot move from licensee to licensee or fly under the radar," Klipin said.
"A public register that lists details about advisers for consumers and dealer groups could be part of the solution."
