Virtually two years of complaints and lobbying have paid dividends for the financial planning industry which ultimately managed to convince the Government that, while many advisers might support the objectives of the Financial Adviser Standards and Ethics Authority (FASEA), they did not support the body itself.
Almost from the get-go there were questions about the make-up of the board in terms of the representation of academics, consumer representatives, financial advisers and an ethicist. And perceptions were not assisted when its first chief executive, Deen Sanders, left the organisation amid industry chatter about the board and its chair, Catherine Walter.
Then, too, there was concern among advisers that they were being disadvantaged because FASEA had failed to deliver on the deadlines set for it – something which impacted advisers’ ability to sit the examination and meet the FASEA degree-minimum education standard.
The Government sought to address this by extending the deadlines by a year, but the problems and negativity around FASEA did not go away.
But a greater ongoing problem for FASEA and adviser perceptions of it was the Financial Adviser Code of Ethics and the consultation process which had surrounded its development, particularly Standard 3 and FASEA’s seeming reluctance to make public submissions around the code of ethics process.
When those submissions were eventually made public they simply raised further questions about the undue influence of consumer groups and the role of academics, some of which had connections to members of the FASEA board.
While the FASEA was established at a time when former Financial Services Minister, Kelly O’Dwyer, held the portfolio it has undoubtedly been Senator Hume who has had to deal with what was becoming a loud chorus of complaints from the industry and a growing file of adverse news stories.
What is more, the operation of FASEA had served to unite the major financial planning groups in a manner which had not been previously witnessed.
By disbanding the FASEA and devolving its standards setting responsibilities into Treasury while putting code monitoring under the auspices of the Australian Securities and Investments Commission (ASIC), Hume has cleverly killed two birds with one stone – defusing industry unhappiness while effectively making ASIC the single disciplinary body.
Given the workings of Government and the value of corporate knowledge, it is highly likely that a good number of FASEA staff will simply be shifted to Treasury and perhaps a few to ASIC. The FASEA board, however, is no longer relevant.
