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The six-month ban placed on a South Australian broker has been labelled as heavy handed by the industry and various stakeholders.
After The Adviser broke the story yesterday, brokers have come to the defence of Alex Dryden, who was banned until March next year by the Australian Securities and Investments Commission (ASIC) for what some have called an "honest mistake".
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Mr Dryden was told by ASIC that a clause in his contract was non-compliant, and that the National Consumer Credit Protection Act (NCCP) specifically restricts brokers from placing caveats on a client’s property.
Not only did Mr Dryden never place a caveat on any property, he also removed the clause immediately.
“I would like to see where 'intent' plays a role in this,” said one commenter. “If Mr Dryden's intent was to comply with the law, to act in an open and transparent way with all his client’s dealings and this was evidenced by the ASIC audit, then some acknowledgment of that by ASIC should be granted.
“I do hope ASIC are auditing lenders and 'responsible officers' of lenders with the same zeal as they do brokers! There would certainly be some interesting findings there, particularly when sales targets have to be met under relevant KPIs.”
Another broker said “I agree with ASIC ensuring that brokers abide by the NCCP legislation. However, my understanding of the legislation is to weed out those brokers who operate illegally and to provide guidelines for all of the industry to follow.
“Based on what I have read here, I would suggest ASIC have overreacted and placed a broker who seems to have made a mistake in a position that effects his livelihood.
“I suggest ASIC focus on the bad apples, not the ones who have made an honest mistake and have corrected them when advised by ASIC.”
Peter White, president of the FBAA, which Mr Dryden was a member of up until this month, said that while he empathises with the broker, he was lucky to get away with just six months.
“If you look at ASIC’s history of banning people in the industry, I think you can agree that six months is pretty light. I’m not saying I agree with it, but you have to admit that usually it’s a fine and a ‘See you later, you’re out of here’,” he said.
Mr White, who is celebrating his 35th year in the industry next week, said having a clause about a caveat is an old practice.
“Whether it should be allowed or not is another question, but I’m saying that it’s a very old school thing to do and it’s obviously just stuck on his paperwork from many years before," he said.
“Everyone is very conversant in the regulations, but it’s buried in the act itself that caveats are a big no.”
Mr White said that some brokers are still getting used to the new environment now with NCCP.
“It doesn’t make him a bad person, but yes he stuffed up. In six months’ time, I’m sure he’ll jump back into the game and when that time comes, of course we’ll give him a go. So long as it was an honest mistake and a once off, the FBAA would be more than happy to have him back,” he said.
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