No fine for QROPS adviser who breached code

A financial adviser has been censured and ordered to operate under supervision for at least six months after being found to have breached the code of conduct.

Wednesday, August 23rd 2017, 3:36PM

by Susan Edmunds

The initial decision on the QROPS adviser’s case was released in June.

The adviser admitted breaching code standard 12, and keeping inadequate records. After the Financial Advisers Disciplinary Committee (FADC) hearing, it determined that he had also breached code standard six, which covers behaving professionally.

The FMA’s other claims, including that he was not competent to provide the service he was offering, were rejected by the FADC.

Now the committee has released its penalty decision, which said the established code standard breaches were at the lower end of the scale, though significant.

“They certainly cannot be dismissed as inconsequential but neither are they breaches of dishonesty or impropriety."

It noted that no client had complained and there was no evidence of loss to the clients whose files were the focus of the investigation. It said a costs award against the respondent would not be appropriate.

The FMA had asked for a monetary penalty but that was rejected – the regulator had suggested the FADC had set a tariff of $1000 per code standard breach.

The FADC said the adviser had been effectively suspended from operating as an AFA pending the outcome of the case and that had affected his income.

“From the testimonial we received... it appears the respondent has found the process of audit, complaint and the proceedings before this committee bruising to say the least. We have little doubt that he will undertake the ordered supervision plan genuinely hoping to learn from the challenging process he has experienced.”

Instead he will operate under an FMA supervision plan. The initial period of supervision is six months, but that can be extended provided the overall period does not exceed three years.

During that time it will be assessed and evaluated whether the adviser has improved his professional conduct to a standard that met relevant code standards.

He will pay the cost of the supervision.

Tags: AFA conduct FADC financial advisers FMA QROPS regulation