ASIC went direct to academics to commission controversial submission

The Australian Securities and Investments Commission (ASIC) has admitted that it went direct to Griffith University academics to produce what has proved to be a controversial submission on the Financial Adviser Standards and Ethics Authority (FASEA) code of ethics because it was running short of time. 

It had been assumed the submission had been commissioned via ASIC’s Consumer Advisory Panel, but the regulator has admitted it went direct and commissioned the submission itself, paying $10,000 to the academics, Dr Hugh Breakey and Professor Charles Sampford. 

In a detailed explanation responding to specific questions from a Parliamentary Committee, ASIC said it adopted this approach because of the tight time-frame and acknowledged that it had been assisted by FASEA extending the timeframe for submissions. 

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“In this case, ASIC undertook a direct approach to a number of possible suppliers and recommended suppliers. Direct approaches to particular suppliers was considered appropriate as the work required specialist expertise and needed to be completed within a short-time frame,” the regulator said. 

“The scope of the work was set out by email to the identified supplier, Dr Breakey, who had the necessary expertise, capacity and availability to prepare the submission and attend a roundtable on 29 June 2018 in response to the Financial Adviser Standards and Ethics Authority consultation about:  

i) the draft Code of Ethics for financial advisers; and 

 ii) the proposed guidance on educational pathways for all advisers developed by FASEA.  

“Dr Breakey is an expert in the area FASEA was consulting on. He was the President of the Australian Association for Professional and Applied Ethics, and a Senior Research Fellow at the Institution for Ethics, Governance & Law at Griffith University.” 

“Because of the narrow scope of the work, short time frame and cost of the procurement, the Commonwealth Standard Purchase Order terms and conditions were used to govern this arrangement,” it said. 

NSW Liberal back-bencher, Jason Falinksi had used questions on notice from the Parliamentary Joint Committee on Corporations and Financial Services to question precisely how ASIC had decided to pursue Breakey to develop the submission. 




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That ASIC isn't working on our side is not a surprise, and as much as I'd like to be outraged after reading this I just find myself too tired to be surprised anymore. Where I can feel some rage is thinking about why our representative bodies like the FPA, AFA, AIOFP ad nauseum either totally missed this or decided to ignore what was going on. Maybe as a profession we need to set up a true non-conflicted representative body with a team of lawyers well versed in corporate law that will challenge these consistent attacks.

Spot on Duke... wakey wakey Financial Planning industry.. the FPA was forewarned, but their puppets.

ASIC therefore have lied.
Later last year after we investigated and uncovered the cosy relationship that existed between these academics, ASIC and FASEA,
when questioned how this report eventuated, it was confirmed it had been arranged via ASIC’s Consumer Advisory Panel...not assumed.....confirmed.
When ASIC were put in a corner last year regarding this matter they handballed the answer to deflect any further scrutiny and horrendous PR in the midst of James Shipton’s financial fiasco.
This is a clear indication and evidence that ASIC were driving the consumer agenda bus in regard to FASEA submissions as they already knew the CHOICE submission was locked in.
What they were doing was to stack the submissions to weight it toward a consumer but an anti adviser perspective and they were prepared to use tax payers money in a last minute ditch to do so.
Effectively ASIC lied last year when they confirmed the arrangement had been generated via the Consumer Advisory Panel in order to deflect the direct link they knew existed.
So here we have a regulator of financial services that is prepared to lie about process when they are dictating to advisers the ethics of the provision of advice.

So these academics from Griffith University were “recommended” suppliers??
Did Dr Mark Brimble from FASEA and also from Griffith University have any involvement in the recommendation of these academics to ASIC?

ASIC commissioned the research for one purpose - to add further weight to its own submission. They could have commissioned research into the impacts of the code by consulting with actual practicing advisers, or sought legal advice on the workability of the code. But no, they go straight to an academic with similar views to their own, and now the code is an unworkable mess. And this is the government body Jane Hume is trusting to help make advice more affordable!

Well said George

Interestingly ASIC also ran out of time with their submission at the Royal Commission!
It was rushed, poorly researched and biased.
In addition, during the initial FASEA submission process it was discovered that ASIC were in regular contact and discussion with FASEA in relation to guidance and direction.
Excuse me for thinking this, but isn’t ASIC the regulator and not the legislator?
As time had evolved we have discovered that ASIC see themselves as directing traffic well in advance to legislation being formed.
They are in effect, the financial services
“ influencer”.

Cash for comments? Why is the only place we read about this is in a online publication which is predominately only accessed by Finance professionals. The FPA, AFA etc should be the ones bringing this to the attention of the mainstream.

Look at those running them. Financial planning experience: FPA Dante 3.5yrs, Ben Marshan less than 2yrs: AFA Kewin zero. Their future career is based on relationships they build with financial institutions and government bureaucrats. Zero incentive to ruffle feathers and fight for advisers. My personal experience with failed financial planners (eg. Compliance, paraplanners, admin etc.) is that they have a massive chip on their shoulder and totally unrealistic expectations regarding the way financial advisers should work with clients. So it wouldn't surprise me if Dante and Ben from FPA have equally warped views of our profession.

Agreed - good point Ground Hog.

So lets get this straight. ASIC paid an university to produce a paper on ethics and conflicts of interest in which they made recommendations that the same university directly benefited from. At least they had a good working example of what a conflict of interest is in practice. ASIC and FASEA are corrupt, if they aren't stealing money to pay for personal expenses, they are lying and make decisions to support their friends. I say it is time for a royal commission into ASIC.

FARSEA, ASICs and the so called Ethics Academics have completely and utterly broken Every Code and Every Value of FARSEA.
These bureaucratic clowns wouldn’t have an Ethical Bone in their bodies.
What an absolute RORT !!!
Disgustingly conflicted paid for comment to say exactly what they were instructed to say by ASIC and Choice.

Far out these guys are just treating the ASIC funds as their own little honey pot, using it to back up their own personal ideals, paying others with the same ideals to make phoney submissions, and they are phoney as they were paid for , they were supplied. They supplied goods to ASIC that helped ASIC put their own ideals into these pieces of legislation. They are therefore liars, and also sneaky buggers. It revolts me that I have to pay these guys my hard earned money for this stuff. Surely they will need to be disbanded now, expenses breaches, price hikes, wage rises, now this, cmon government shut them down, start again with some people that dont hate us to start with

Perhaps some readers should take a quick look at the National Tertiary Education Union website and read about the massive restructure, job losses, that has been happening in Academia for years, as a result of new learning styles and AUD movements. Will help you explain what ASIC means when they say "Capacity and availability".

More proof the Swamp needs to be totally drained in Canberra. On both sides.

Mark Brimble has a lot to answer for.

ASIC is corrupt.

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