FPA disciplinary process under scrutiny

By Tim Stewart
 — 1 minute read

The royal commission has put the Financial Planning Association under pressure for its practice of keeping the identities of sanctioned members secret.

Financial Planning Association (FPA) chief executive Dante De Gori admitted yesterday that the only leverage his association has against recalcitrant members is to threaten to publicly name them.

Testifying at the royal commission yesterday, Mr De Gori was asked by counsel assisting Rowena Orr why FPA members who have been the subject of adverse findings should have an "entitlement to confidentiality".


"They shouldn't. There isn't an entitlement to confidentiality. But it is our biggest leverage in terms of actually impacting on change and conduct – or change to conduct," Mr De Gori said.

Asked whether it was the FPA's "only leverage" when disciplining members, Mr De Gori conceded "it is our main leverage, yes".

The issue arose in relation to an FPA investigation into the conduct of financial adviser Sam Henderson who, on Tuesday, admitted to providing advice that, if implemented, would have resulted in a client losing $500,000 in superannuation.

Mr De Gori admitted the final 'agreed terms' with Mr Henderson included a promise of confidentiality, but he was "not aware as to how that particular component got into the final terms".

"It could be quite possible that Mr Henderson requested that," Mr De Gori said, adding Mr Henderson's name would be kept confidential "subject to complying with [agreed] sanctions".

Ms Orr referenced a letter from FPA head of professionalism John Bacon, who asked the matter be kept confidential noting that naming Mr Henderson would "cause significant damage" to his reputation.

"What do you think Mr Bacon meant when he said that identifying Mr Henderson would damage the FPA[']s relationship with its other members?" asked Ms Orr.

"I am not exactly sure, except that he may be referring to the fact that members – members do expect that until the matter is concluded, that their details and the matter of the complaint are remained confidential until its conclusion," Mr De Gori said.

"Well, they expect that it remain[s] confidential after its conclusion, don't they, Mr De Gori?" Ms Orr asked.

"They may wish that but that's obviously not always going to be the case," he replied.

Mr De Gori went on to say that confidentiality is the FPA's "biggest leverage in terms of actually impacting on change and conduct".

You can follow the royal commission hearings on a live blog at InvestorDaily's sister publication ifa.


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