ABSTRACT
Advisers are dual agents, which leads to conflicts of interest from association and a lack of independence, which are important to the public. The licensee–adviser licensing model is illegitimate, because it makes achieving four identified objectives of the Commonwealth Corporations Act 2001 difficult, if not impossible, and it fails the tests of Suchman’s legitimacy criteria. Survey respondents pointed out the top three key drivers leading to illegitimacy were (1) unintentional [and intentional] breaches of the statutory best interest duty, (2) practices resulting in misaligning adviser–client’s interests and (3) licensees’ commercial interests compromising the best interest duty. These results strengthened arguments for individual licensing through a single independent professional body, like other professionals. Survey respondents make known preference for licensing via a single independent body. However, advisers fear losing the subsidised support services licensees offered them, such as inter alia software, training, professional indemnity, research, compliance and legal and back office support. Furthermore, for some advisers, licensing costs are another major concern.
