FPA Calls for Improved Whistleblowing Framework

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A co-regulatory model, which encourages sharing of information between industry bodies, would help remove wrong-doers from the advice profession, according to the Financial Planning Association.

Mark Rantall, FPA CEO
Mark Rantall, FPA CEO

Speaking to riskinfo during the FPA’s Professionals Congress, held in Adelaide from 19-21 November, FPA CEO, Mark Rantall, said the removal of ‘bad apples’ from the profession was one of the reasons why the FPA was lobbying so hard for a co-regulatory model.

“We have, for a long time now, talked about a co-regulatory model with the regulator, ASIC in this case, the profession, and licensees. It’s exactly that issue that would benefit from a co-regulatory model. Under the umbrella of privacy, we would be able to share information about situations where inappropriate advice is being given, and each party could then take the appropriate action to make sure that consumer protection was in place.

“This is also the benefit of the ASIC (adviser) register. If each of those parties took action – the regulator, the profession and the licensee – and there’s an adviser register, then it leaves advisers who are giving inappropriate advice nowhere to go.

“To our mind, it’s not a silver bullet, but it’s a wonderful mechanism to ensure that, if there are financial planners out there deliberately doing the wrong thing, that they’re identified, dealt with, and not able to continue to do the wrong thing.”

…if they’re outed on the register, they’ve got nowhere to go

Mr Rantall reiterated this view on a panel discussion about whistleblowing within the financial advice sector, highlighting the importance of individuals taking a stand against wrong-doing.

“If you close ranks around a problem adviser, through your licensee, your profession, and your regulator, and if they’re outed on the register, they’ve got nowhere to go,” he said.

Mr Rantall was joined on the panel by Commonwealth Bank advice scandal whistleblower, Jeff Morris, and lawyer Peter Bobbin, who used the legal profession to illustrate the value of a ‘profession guarding its own’.

“I get an email from the Law Society every week, which among other things includes the details of any practitioner who has had their license suspended or revoked – that happens in every profession. But it’s not on the front pages; it’s in an email that comes directly to me. And I rejoice in that. Because it means it’s my profession guarding my profession,” Mr Bobbin said.

He acknowledged that while, to date, the systems to support whistleblowers, both inside organisations and through the regulator, needed improvement, recent events, such as the Parliamentary inquiry into ASIC’s handling of the CBA advice scandal, were likely to lead to positive change.

Personally, I’m sick of seeing groups of victims on TV

“Perhaps in five or ten years’ time we can look back and say: ‘This is where the proper culture of ethics and caring for clients stemmed from’. I’m hopeful that ASIC will feel so ‘bashed over the head with this’ that they’ll take some risks, and go out and attack financial planners – the ones that are not good for the profession.”

Mr Bobbin also pointed out that a failure to report a serious, indictable offence could lead to jail time.

“Fraud, for example, is a serious, indictable offence. So the law says that if you know or you reasonably believe that fraud has been committed, and you don’t bring that to the attention of the police, and had you done so it may have led to a conviction, then there is a potential risk of jail.”

All panellists did, however, acknowledge that whistleblowing was a very difficult, and often traumatic event, and it took courage to stand up against injustice.

“It’s an incredibly tough process,” conceded Mr Morris. “No matter how hard you think it’s going to be, it’s harder. But the thing is, you get back up and you keep going, and you keep getting stronger and stronger. Now I look back and think: ‘Look at what we’ve achieved’. This really is a catalyst for change. Personally, I’m sick of seeing groups of victims on TV. There’s a section of the industry that brings us all into disgrace – that hasn’t changed. It is unfair to the planner population, and it needs to change.”



1 COMMENT

  1. It is time for the profession to make it clear to the minority amongst us.
    Do the right thing, or get out of the industry!
    This is the only way forward, and the only way we can prove ourselves.
    Turning a blind eye to improper practices must become history.
    If it’s not right, and you keep doing it, we will be after you, not just the odd client or ASIC, but the entire industry!
    Every adviser, every client, every industry body, the media, and every regulator is watching, and you will be found!

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