The collapse of Storm Financial has raised issues over when an association or industry body should intervene in the matters of a financial services firm.
"I think that will be the debate of the year," FPA chief executive Jo-Anne Bloch told InvestorDaily.
"The timeline between foresight and hindsight is a soft one, and the point in which you step in is always an issue and I think that will be a debate going forward for the whole industry," Bloch said.
Her comments come in the wake of the financial planning firm entering voluntary administration and having receivers appointed.
Since the firm's collapse on 15 January, many within the industry have speculated over whether an industry body such as the FPA or corporate regulator ASIC should have stepped in earlier to prevent the fallout.
Bloch said that prior to November 2008 the FPA had no cause to investigate Storm as they had completed their compliance requirements and conducted themselves like any other member of the FPA.
"The fact that margin lending will become a regulated financial services product will help," she said.
"It has been a gap in financial services that margin lending has fallen between the cracks, but the issue in terms of Storm's business model and at what point of time do you step in is one where Australian law is pretty clear and the concept of innocent until proven guilty must apply.
"And we as a professional organisation are no different to a court of law."
