SME financial advisers reject Financial Services Council's capital buffer call

www.afr.com
3 min read
fairly difficult
Small and independent financial services licensees have urged the government to bring fund managers under its compensation scheme of last resort.
But lobbyists for the smaller end of the market have come out swinging against the proposed amendments to the scheme's draft legislation, saying additional burdens on licensees would push professional financial advice further out of the reach of retail investors.

Peter Johnston of the Association of Independently Owned Financial Professionals, which represents privately owned licensees not linked to banks or investment management houses, said placing additional capital buffers on his members unfairly blamed them for industry-wide misconduct.

"Only 1 per cent of the 70,000 annual consumer complaints [to AFCA] are against advisers," Mr Johnston. "The other 99 per cent are against the big institutions. Of the 1 per cent complaints against advisers, over 90 per cent were settled."

Fundies roped in

The Australian Financial Review has seen correspondence from AFCA confirming those figures. However, despite being responsible for just a fraction of complaints, it is understood that financial advice licensees account for as many as 75 per cent of unpaid determinations.

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