Tabcorp is set for a bumper week on the
Gold Coast as the Who’s Who of the funds management industry gather at
the Jupiters Casino-Convention Centre complex for the 2006 IFSA Conference.

The
two opening plenary sessions were watched by more than 700 delegates
and featured the deliciously ironic pairing of IFSA chairman and AMP
Financial Services boss Craig Dunn introducing and later putting
questions to ASIC chairman Jeffrey Lucy.

Of course, this was just a week after ASIC dragged AMP’s name through the mud with the enforceable undertakings about the conflicts of interest, commissions and omissions that were proven rife throughout its adviser network.

Lucy’s speech
didn’t shirk the issue but he was keen to stress the politeness of the
dealings: “May I remind you that AMP offered, and we accepted, the
enforceable undertaking.”

Many observers believe that
Australia’s biggest financial advisory group should have been taken to
court because the evidence from ASIC’s survey of 300 files randomly
selected from 30 AMP planners was damning. Lucy said as much:

“Our analysis revealed, among other things, that on many occasions AMP:

* financial advisers’ files did not disclose a reasonable basis for advice;

* failed to make proper disclosures about the costs of acquiring the recommended products; and

*
may not have had adequate arrangements in place to manage conflicts of
interest, including the commission-based remuneration of its financial
advisers.”

Instead, we had Lucy standing next to Craig Dunn on
the Gold Coast declaring that the industry was “sound” when the biggest
player in advice had just been discovered to be rather unsound.

Indeed, when asked in an earlier plenary panel about the one thing he
would like to reform, Colonial First State CEO John Pearce said IFSA
had to roll up its sleeves and get involved in cleaning up the advice
industry. That puts Craig Dunn and AMP in a rather awkward situation.

Gary Weaven and the industry funds are no doubt enjoying AMP’s pain as
they spend $20 million on advertising and also attempt to cash in on
the Westpoint crisis which has done enormous damage to the credibility
of financial planners. Industry funds, of course, don’t pay planners
commissions, which is why they so rarely get business referred.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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