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Code breaches force retirement An adviser has been forced out of the profession following two Code Standard breaches. She tells her story to ASSET as a ‘lesson’ to colleagues in the industry. BY MATTHEW MARTIN
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he long-serving financial adviser recently censured by the Financial Advisers Disciplinary Committee (FADC) tribunal says she wants to tell her story after the process left her frustrated, disappointed and ultimately forced her out of the profession. The woman, who cannot be named due to a suppression order, says her experience with the tribunal should be seen as a lesson to other advisers who may get too comfortable with long-term clients. In March this year, the FADC released its decision, after a hearing was held in December 2020, to censure the woman for breaches of two Code Standards, also deciding to suppress her name. Staff at both the Financial Markets Authority (FMA) and FADC spent a total of 1,684 hours on the case as well as spending $20,739 on the process. 18 | ASSET 03 | 2021
The adviser spoke to ASSET saying she did not want her name suppressed and would have been happy for it to be revealed as most people in the industry knew who she was anyway. “If I’d been used as a scapegoat and people could have learned from it that would have been okay. That would have made some sense. But it didn’t happen that way,” she says. In its decision, the FADC stated it had found the adviser had breached Code Standards 12 and 15 of the Code of Professional Conduct for Authorised Financial Advisers and she had failed to: (a) in the case of three clients, record in writing adequate information about a personalised service provided to a retail client (b) demonstrate adequate knowledge of the relevant legislative obligations which result from the term “personalised service”.
The FADC said her breaches of the Code were less serious than most cases that had come before the committee and there “... is no suggestion that the respondent has improperly benefited at the expense of her clients, or that any client has been disadvantaged”. Up until the decision, the adviser had never been censured in her almost 40-year career, but the FADC said the breaches were “not to be treated lightly”. “Record keeping is a fundamental duty of an adviser that underpins the supervisory regime established by the act and its importance cannot be minimised. It’s therefore important to sanction breaches where there are multiple instances of poor record-keeping,” said the committee in its decision. “There is a need to reinforce professional standards and ensure the profession remains conscious of the significance of proper records.”
