FPA examines compensation salvation
The Financial Planning Association (FPA) has hosted a “think tank” to discuss how investors could be compensated after investment schemes fail.
The FPA, which represents 12,000 financial advisers nationwide, initiated last week’s meeting after the Westpoint collapse and the failure of property investment scheme Fincorp.
The meeting was attended by Choice (formerly the Australian Consumers’ Association) Senior Policy Officer Nick Coates, Federal Treasury Financial Services Manager Ruth Smith, FICS CEO Alison Maynard and other representatives of the financial services industry.
Treasury released draft regulations last November to establish a pooled compensation fund financed by financial advisers – a similar arrangement to a general insurance compensation scheme being considered at present. A final recommendation is expected within six months.
Choice and FICS are believed to be in support. However, this is not the FPA’s preferred option, as it fears financial advisers “doing the right thing” could end up bearing the costs of those who transgress.
The FPA, which represents 12,000 financial advisers nationwide, initiated last week’s meeting after the Westpoint collapse and the failure of property investment scheme Fincorp.
The meeting was attended by Choice (formerly the Australian Consumers’ Association) Senior Policy Officer Nick Coates, Federal Treasury Financial Services Manager Ruth Smith, FICS CEO Alison Maynard and other representatives of the financial services industry.
Treasury released draft regulations last November to establish a pooled compensation fund financed by financial advisers – a similar arrangement to a general insurance compensation scheme being considered at present. A final recommendation is expected within six months.
Choice and FICS are believed to be in support. However, this is not the FPA’s preferred option, as it fears financial advisers “doing the right thing” could end up bearing the costs of those who transgress.