Counsel assisting Rowena Orr QC gave an indefatigable four-hour performance on Friday, as she delivered a closing statement that summed up two weeks of evidence from the financial advice sector.
The evidence covered the topics of fees for no service, investment platform fees, inappropriate financial advice, improper conduct by financial advisers, and the disciplinary regime of the financial advice profession.
Ms Orr went through each case study, identifying findings against all of the major players she regarded as being “open on the evidence” (and which parties will be given an opportunity to respond in writing by 4 May).
“On the evidence, it is open to the Commissioner to find that the charging of fees for no service by AMP and its advice licensees might have amounted to misconduct,” Ms Orr said.
AMP advice licensees may also have engaged in misconduct by contravening section 912A(1)(a) of the Corporations Act to “do all things necessary to ensure the financial services covered by their licence are provided efficiently, honestly and fairly”, she said.
The relevant conduct as far as AMP is concerned relates to the application of the 90-day exception to clients in AMP’s ‘buyer of last resort’ (BOLR) pool, otherwise known as the ‘ringfencing’ of clients, Ms Orr said.
“It is open to the Commissioner to find that this conduct was attributable, at least in part, to the culture and governance practices within AMP,” she said.
“The evidence of Mr [Jack] Regan demonstrated that senior management and employees of AMP advice licensees were aware that the conduct was a breach of their financial services licences but continued to engage in the conduct.”
The second case study related to the charging of fees for no service by CBA, Ms Orr said.
“On the evidence, it is open to the Commissioner to find that the conduct of the CBA advice licensees, CFPL, BW Financial Advice and Count might amount to misconduct,” she said – again, in possible breach of 912A(1)(a) of the Corporations Act.
Ms Orr went on to discuss similar case studies an ANZ and Westpac, where it was open to the Commissioner to find breaches of the Corporations Act, along with damning assessments of behaviour at Dover Financial Advisers.
She also questioned the FPA’s practice of keeping the names of members under investigation confidential, as well as playing down the AFA’s desire to be a ‘co-regulator’ (especially given that it only hears from ASIC when the regulator issues a media release).
You can read over a blog of the hearings that ran for the past two weeks on InvestorDaily sister title ifa.
