Bombshells here, bombshells there
By
Kate Kachor
Mon 29 Jun 2009
What a week for the industry.
Midway through last week, industry body Investment and Financial Services Association (IFSA) dropped a bombshell in the form of its fee charter.
IFSA's initiative, said to be association chief Richard Gilbert's last hurrah, is aimed at creating a fairer and more competitive superannuation system for Australia.
The new charter travels down a similar road to the FPA's proposed dismissal of commission payments to advisers.
However, unlike the FPA's proposal, IFSA's charter is focused on fees for financial advice in super.
Just a day later, banking giant Commonwealth Bank of Australia (CBA) released its own bombshell.
After six months of relative silence, the bank informed the market it indeed did play a part in the failure of advice firm Storm Financial.
CBA's statement said the bank was involved, not directly, with the loans made out to Storm clients.
Interestingly, despite admitting an involvement in Storm's collapse, CBA claimed it was not responsible for the financial advice provided by Storm Financial to the bank's customers.
"However, the bank is not responsible for the financial advice provided independently by Storm Financial to the bank's customers. That was clearly the responsibility of Storm Financial, a licensed financial advisory company," CBA chief Ralph Morris said.
Commenting on CBA's claim, FBA chief Jo-Anne Bloch said: "Our interest is obviously in relation to Storm Financial and the FPA members that were working with Storm and whether they have breached our code of ethics and rules of conduct.
"But I think the CBA is clearly acting in anticipation of the PJC (Parliamentary Joint Committee on Corporations and Financial Services) inquiry [into financial products and services] and we look forward to all parties tabling their perspective."
The admission, despite claiming to be merely a bridesmaid not the bride, has created much interest.
ASIC chair Tony D'Aloisio also came under the spotlight this week after appearing in front of the parliamentary joint committee inquiry.
Not only was D'Aloisio drilled over ASIC's handling of the collapse of Storm, he also faced questions over the regulator's involvement in failed firms Timbercorp, Great Southern and City Pacific.
Many would no doubt be pleased he was finally in the hot seat.
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