The Australian Investors’ Association (AIA) has launched a scathing attack on financial planners following the release of the Australian Securities and Investments Commission (ASIC) report (see previous story). It claims the Financial Planning Association (FPA) is in breach of the Trade Practices Act and should be prosecuted by the Australian Competition and Consumer Commission.

The AIA says the FPA’s Code of Ethics is “false and misleading” because some members have chosen to ignore Rule 106 which requires planners to disclose any perks they receive from companies for recommending certain products. “However, this has not stopped the FPA using the Code of Ethics as a primary reason for consumers to place their trust and their money with FPA members,” the AIA said.

Describing ASIC’s non-action on planners as a “wet lettuce” approach, it says it expects the sector will be “truly wilted by the time any improvement is observed”.

“We cannot understand why ASIC does not take the action it is empowered to against the licensees it mentions in the report,” AIA President Bob Andrew said. “These law-breakers have no excuse, having recently applied for, and been granted, a licence under the new regime; a regime we were told would provide significantly greater protection for consumers.”