Time for clarity and a clean house on FASEA

As 2020 draws to a close, it is worth noting that the Financial Adviser Standards and Ethics Authority (FASEA) was high on the list of problem areas for financial advisers in January and it remains just as high on that list as we begin to close out the year in November.

The FASEA was established with good intentions. It was established to help drive higher standards and more professionalism in the financial planning industry and it has arguably succeeded in achieving some of the objectives the Government set for it back in 2016/17.

But what FASEA has most definitely not done is win the support of a majority of the financial planning industry – something which it needed to do if it was to successfully take them on the journey outlined in its statutory objectives.

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If any proof were needed of this, the FASEA board received it in late October and early November as the major financial planning organisations lodged their submissions responding to FASEA’s latest guidance around the authority’s Financial Planner code of ethics. Putting aside the polite expressions of support for FASEA’s objectives, virtually every major advice organisation has made clear they remain deeply dissatisfied.

This should be of considerable concern to the Government and, in particular, the Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, because the continuing complaints of the Financial Planning Association (FPA), Association of Financial Advisers (AFA), the SMSF Association, the Institute of Managed Account Professionals (IMAP) and the Stockbrokers and Financial Advisers Association (SAFAA) make clear that FASEA is seriously at odds with the operational end of the financial planning industry.

What is more, FASEA has been seriously at odds with the operational end of the financial planning industry for more than 18 months, particularly around Standard 3 of the code of ethics, without having been able to satisfactorily repair the situation.

What should also be concerning to Hume is that any examination of statements made within Senate Estimates or within the House of Representatives Standing Committee on Economics suggests that politicians on both side of politics are painfully aware of the criticisms of FASEA with a number of Government backbenchers openly challenging the actions of the authority and its executives.

It is in all these circumstances that the Government would do well to roll the operations of FASEA into the new Financial Adviser Single Disciplinary Body recommended by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. What is more, it would do well to ensure that the FASEA code of ethics is made fit for purpose before the Single Disciplinary Body becomes operational.

The simple bottom line is that because of the Government’s decision not to proceed with Code Monitoring Authorities and because of the time taken to establish the Single

Disciplinary Body advisers have been left to deal with an arguably flawed code of ethics while operating in highly nebulous regulatory territory. Advisers deserve better and the Government should clearly signal its intentions.

This is the last print edition of Money Management for 2020. The Money Management daily e-newsletter will continue through to Friday, 18 December and resume in the second week of January. The print edition will be back in February.

On that basis, myself and the entire team at Money Management wish our readers an early Merry Christmas and safe and prosperous New Year.

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FARSEA couldn’t run a chook raffle properly.
Completely conflicted, biased and unethical.
No-one in the Industry agrees with them, besides Choice Magazine and they aren’t even in the Industry and clearly represent the Left wing loonatic idealogs only.
Great job FARSEA.

Why does a Senior Advisor of 33yrs experience (age 65) have to spend approximately $24,000 on a University degree to stay in the industry? I am talking about myself and other Senior Financial Advisers of similar experience. Most will leave the industry. To the government, you can stop the exodus of such irreplaceable experience the industry and more importantly, clients cannot afford to lose.
Rob Turner

I'm with you Rob. The government has lost the plot on this, if it ever had one. It's been led astray by the Union Super Funds, the hopelessly conflicted Hayne Royal Commission and political correctness (if it works, destroy it and replace it with something far worse). FASEA might be on the way out, and ASIC should be next on the list, but no. ASIC is about to become the wolf guarding the sheep with no-one watching. And the sheep are being fleeced to pay the wolf for it's actions. Not even in my wildest nightmares could I have come up with that one.
The only reason I stay in the sheep pen is my loyalty to my clients. Don't know how long that will last.

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