The Commonwealth Bank of Australia’s call for a registry of financial planners and the introduction of a financial planner passport scheme similar to the one operating in the USA, has been met with disapproval.
The scheme proposed by the CBA would force advisers to carry an identity card detailing their experience and conduct within the financial services sector.
The bank has called for the proposal in an official submission to the inquiry into the performance of the corporate regulator and for greater checks and balances on individual advisers. The submission was in response to parliamentary concerns over ASIC’s handling of poor advice given by Commonwealth Financial Planning advisers and the CBA proposed passport scheme would be administered by ASIC and funded by the industry itself.
Former ASIC official and Perth-based consultant Joe Ruzzi, said that the call for a passport scheme was “misguided” and that, “the last thing Australian financial planners should be doing is to look to the USA for guidance.”
The former official suggested several options as an alternative to the US passport system – that no provider of financial advice should be employed, engaged, or contracted by a product provider and that the compensation options in the industry should be reviewed.