In a letter addressed to FPA chair Matthew Rowe – seen by InvestorDaily – AIOFP executive director Peter Johnston said the board of his organisation is “frustrated and dismayed” by the FPA’s public comments in the aftermath of the senate committee report on the CBA advice scandal and the performance of ASIC.
“In the current case of [Commonwealth Financial Planning], it is clearly a product manufacturer/management issue that allowed their advisers to indulge in advice and activities that were clearly not in the best interests of clients,” Mr Johnston wrote.
“The FPA are intimating CFP is an advice issue that exists across the entire industry and therefore you are calling for, and trying to justify, your recently released 10-Point Plan to be ratified.”
Mr Johnston described the CBA advice scandal as “a prime example of an institution lacking integrity, not the advisers” and hit out at what he said is an “adviser-centric” approach to reform in the financial advice market, singling out the FPA’s suggestion to host an industry-wide summit to examine the senate committee report recommendations.
“The FPA’s almost egotistical attempt to bring the industry together for a ‘summit and save the industry’ will not get our support.
“This is a very serious institutional incident that potentially affects a large portion of the FSC and FPA’s membership; we do not want it portrayed as an ‘industry wide dilemma that the white knight FPA must fix.
“This is clearly an FSC/FPA problem, not the independents, and a defining moment where consumers can decide whether they wish to seek advice from the institutions or independents.”
Mr Johnston said the FPA and FSC should investigate “conduct of the other institutional advisers” rather than seeking to implement industry-wide changes.
