Doctor referrals would fail FASEA Standard 3

Doctors who refer patients to pathologists for blood tests would likely breach Standard 3 of the Financial Adviser Standards and Ethics Authority (FASEA) code of ethics and this reflects the inappropriateness of the current situation, according to the acting chief executive of the Association of Financial Advisers (AFA), Phil Anderson.

Anderson has used a discussion around Standard 3 to urge the authority to revisit the code of ethics to make it more fit for purpose, arguing that pathology referrals would come to a halt if the same reasoning were applied to the medical profession.

What is more, Anderson suggested that a starting point for FASEA in developing the code of ethics for financial advisers should have been contrasting it with other professions.

Related News:

Looking at Standard 3, he said the primary ethical duty in was that, “if you have a conflict of interest or duty, you must disclose the conflict to the client and you must not act”.

“Would pathology referrals need to come to a grinding halt if FASEA Standard 3 applied to doctors?” Anderson said.

 “I wonder if FASEA took the time to contrast what happens in other professions before they quickly put in place the final wording of Standard 3 in February 2019. I suspect not,” he said.

“Hopefully with the benefit of time, they will change this Standard and we can all go back to working and living in the real world,” Anderson s





Recommended for you



The problem with the comparison is that a referral to pathology results in the same outcome irrespective of conflict the same cannot be said in financial services.

Agree, it's a silly analogy

There are more conflicts of interest in the medical profession than many others. However, they are not required to disclose anything to clients/patients and they certainly don't have to refrain from acting. Does a pharmacist disclose their interest in recommending the "chemists' own" brand of drug? Does the dentist disclose the marketing payments they make for using certain brands of orthodontics, does the GP disclose the drug company funded international conferences they attend? I think Phil certainly has a point here. There is also the overlay of the other standards which forbid treating with a client immediately on a scaled or scoped engagement such that the adviser needs to start with full information on the client (and refuse to treat with the client who does not wish to provide full information) and provide a full holistic assessment of all the client's actual and likely needs. This is akin to going to the doctor with a cold but being told you need a full medical completed before the doctor can treat the cold. The same could be said of instructing a lawyer or an accountant where they would need to understand everything about you before agreeing to the engagement. I think what Phil is pointing out here is that the Code is completely over the top when comparing other professions/industries and elements of it are just frankly unworkable in practise.

well said. the way it works in other professions is that professionals are left to make the judgment that is in the best interest of their client, after obtaining appropriate qualifications and experience. they also have an ethical code and disclose and manage conflicts of interest to an acceptably low level.

imagine if the government tried to tell medical practitioners, or legal practitioners, or accountants how to run their practices they would be up in arms. yet they are not even that well qualified.

what's the qualification that these high and mightly professionals from other professions hold anyway.

medicine - 4-year bachelors degree AQF 7, it's not a doctorate, the universities just give you a piece of paper, the only real doctorate is a Ph.D

lawyer - 3-year law degree and a grad dip of legal practice AQF 8

accountant - graduate diploma (AQF) 8 and 3 years practical experience

financial planner - new entrant Bachelor degree and 1-year PY, existing advisers Grad dip AQF 8 and ethics exam

why so many requirements for me, and I hold an m.fin plan, passed the fasea exam, and hold a higher award than most other "professionals"

I'm going to wade in here as a practicing doctor to dispute your claim that doctors practice after a 4 year bachelor's. What the degree confers (at minimum 4 years at a post graduate or 5 years undergraduate level) is the permission to work in a teaching hospital as an intern under the direct supervision of a qualified specialist. To work independently as a specialist requires at least another 3 years minimum to become a GP and in many cases at least 6 years or more of further post graduate work (and in many cases may require a phD) which will include multiple barrier exams and further professional qualifications. Additionally the Australian health practitioner regulation agency (with whom we must register to work) keeps the register on practicing doctors with the explicit purpose of protecting the public rather than the practitioner. There exists mandatory reporting requirements if we witness a colleague practice under impairment or intoxication, practice that departs from acceptable standards or is involved in sexual misconduct. Likewise hospital accreditation standards require regular audits and investigation into unexpected deaths, near misses and serious adverse events. There are therefore multiple levels of bureaucracy to ensure ethical standards are met, standards of practice kept up to date and records kept to maintain transparency and accountability. My understanding of law (not being a lawyer) is that likewise there is a big difference between a law graduate and a lawyer, and there is are similar oversight process.
I'm not familiar with the proposed changes to Fasea standards however if these standards improve record keeping, transparency and independent oversight with the view of maintaining or improving ethical standards then I imagine this will be for good reasons. Naturally the implementation of standards may be difficult and convoluted and may generate its own issues. I imagine these standards however, in trying to improving transparency and oversight, should improve the confidence of the general public in the services of the particular profession and, long term, benefit practitioners as a whole

Thanks Hui, what about the issue of benefits from pathology services and other payments benefits received from pharma companies? Part of the issue here is the point that you can't educate people away from unethical behaviour, it's either in them or it's not. Or people have significant ways in which they convince themselves they are acting independently.

I don't really understand your dispute. many financial planners have multiple advanced degrees, and also hold doctorates just like many doctors do. that's not mandatory to enter the profession, I am talking about basic training to enter the profession.

I have many clients and friends who are doctors who have either a 4-year mbbs or a mbbs and masters which is at AQF9, no more than me.

many financial planners (myself included) today have a masters degree at AQF 9 and also have to sit an ethics exam and all new entrants must do 1-year Professional year.

many professional financial planners are also specialists, for example, they may also be an accountant with post-graduate education and a second masters in accounting or an MBA. Becoming an accountant also requires 3 years of practical experience so the total qualifying period for an accountant is also 6 years, as well as being a financial planner which has its own separate qualification requirements with very little cross-credit for studies done prior between the two specialties.

I am saying and I am right that no other professional - including doctors - is much more qualified than financial planners today.

in the past 12 months, the AMA received nearly 10,000 complaints about doctors (please check with the AMA and confirm it all for us). in the past 12 months, financial planners received around 1500. you can confirm this with AFCA data (though they probably don't want to release that level of granular data because they also support another narrative). mortgage brokers on the other hand received only 7 complaints. the number of complaints about mortgage brokers was so low they had to be grouped with "other" categories.

data don't lie. if one has a theory and the data does not agree with that theory. the hypothesis is wrong.

there is a negative narrative and pervasive perception that exists in the community that financial planners are evil wrongdoers who at the slight chance would sell their mother and father and that they are woefully qualified.

I am just myth-busting that financial planners are not less qualified, and equally qualified as any other profession, and in fact, the data says we get fewer complaints than other professions.

peace out, m fin plan cfp fasea passed adviser with more than 6 years of specialist training and a second masters at AQF9

On a final note, the work financial planners do is no less noble than what doctors do. There is an old saying that says, "your health is your wealth".

I disagree, in fact, your WEALTH is your health. richer people live longer, they cost the community less, they cost the government less.

I should be given a meritorious service award for service excellence to the community making many personal and professional sacrifices over many years.

p.s I don't make stuff up, it's all in the data it tells the truth

Hi Bozo
Thanks for linking this back to the article, regarding the analogy, I think there are multiple comments earlier in the piece which effectively surmises my own opinion that it's not particularly accurate, at least in the way I practice and in the way I understand most doctors practice, as I have no control over which pathology service the patient ends up attending. There are what I'd call "nudge" factors such as location, convenience, the name of the pathology service on the referral forms and other marketing factors but ultimately the pathologist is independent. I also am not aware of any pathology clinics who practice remuneration strategies but perhaps they've just not approached me with these strategies.

From what I understand of Standard 3 "You must not advise, refer or act in any other manner where you have a conflict of interest or duty" seems to largely mirror standards for doctors already in place. From the AMA code of ethics regarding conflict of interest:
3.5.1 Ensure your financial or other interests are secondary to your primary duty to serve patients' interest. Financial and other interests should not compromise, or be perceived to compromise, your professional judgement, capacity to serve patients' interests or the community's trust in the integrity of the medical profession"
3.5.2 Disclose your financial or other interests that may affect, or be perceived to affect, patient care
3.5.3 If you refer a patient to a facility, or recommend a treatment or product in which you have a financial interest, inform them of that interest and provide the patient with other options, where possible.
MDA (one of our professional indemnity insurers) has a blog post on receiving benefits in primary care (
The short of it is that it's unprofessional, and the law indicates that we should avoid these, and if caught, this would be grounds for fines, suspension and deregistration. That's not to say it doesn't happen, but practitioners would accept such benefits at the risk to their own registration. Compliance then becomes an issue about oversight and transparency.

Thanks Anon for clarifying, for reference, I believe financial planners have a valid and important role in today's society and have personally engaged these services. I don't think what I do is noble, I've been exposed to all manner of bodily fluids, engaged with agitated and aggressive people, and constantly work unsociable hours. I think my job is necessary and gritty but am renumerated in kind to do this work. I like to think I add value to some people's lives and know I don't to a number of people.
Regarding what I took issue with, was mostly the line
"why so many requirements for me, and I hold an m.fin plan, passed the fasea exam, and hold a higher award than most other "professionals""
I would argue that all professionals should be held to standards and such standards maintained with transparency and oversight in a non-self regulating way as part of being part of the "professionals" club. My post only illustrates that not only is there extensive training to practice independently, but there is a bureaucratic burden as part of being part of "professionals". Again, this is not about education, but about ongoing transparency and oversight to ensure commitments to standards, competencies, integrity and ethics, with emphasis on being "accountable to those served and to society" (
The fact that the AMA receives so many complaints yet trust remains in the medical profession I would argue illustrates how transparent and accountable medical practices currently are. I personally know of very competent doctors who have been subject to complaints but because of record keeping and clearly illustrating how standards have been maintained, are able to continue practicing.

Regarding your P.S. Yes, health and wealth are linked, just as health is linked to genetics, environmental exposures, sex and ethnicity. It is also linked to multiple other social determinants including employment, literacy, incarceration, early childhood development, social norms and culture ( The links are recognised (including in your NYT article you linked), but the causative vs correlation argument complex (indeed your source study recognises they observed a correlation). Idioms are generally reductive and I don't think it's going to be an accurate way of finding truth.

Don't understand the comparison? Not all doctors own pathology services or get money back from them surely? Unless I'm missing something, this is why our 'profession' is not taken seriously.

Paul is in the money, The trouble with Phil and his AFA mates, is that they think “professionalism” is wearing a smart suit and talking-the-talk. IF the client’s outcome was universally better no matter who they are referred to, then he has a point. The reality is that the referral is inevitably linked to the inbuilt conflicts whether it is a direct kick-back or through management or other fees shared.

I listened to this guy try and defend trail commissions 5 years ago and thought he was out of step with where the industry is heading and this confirms it.

It feels that a few influential practices have his ear and he is pandering to their requests

A better comparison is Doctors prescribing particular drug brands, based on the conferences or incentives offered by that company, rather than strictly on known outcomes & side-effects. Probably a practise that should really be stamped out as well, hence why it wasn't used?

Will this also apply to those dealer groups that have investment products on their APL's, which the dealer group owners have an equity stake in?

Usually through a separate company, so it doesn't show up as vertical integration?

Asking for a friend...

The reality is Standard 3 is still being worked through with regulators in terms of real impact. But the literal reading of it means the answer to your question is the adviser shouldn't act or use the product associated with the dealer.

What do you mean they are still working it out - is that another way of saying they have no idea what they are doing and they should resign so that others with appropriate skills and knowledge can do the job correctly in the first place?

Do we really need more regulators with no idea having a go? What could possibly got wrong - except more work for them to clean up the mess they make.

If you talk to any compliance officer in any AFSL in Australia, and the Managed Account Assoc etc, they have all sort clarification on how this actually works in practice. Because if taken literally, then a significant number are out of business. The regulator is working through examples apparently. My guess is it will never be tested because it is recognised as a farce, but maybe tested in really obvious cases where virtually no circumstance saw the conflict as justifiable.

What about this analogy. You go to a doctor to get advice on some type of illness. They may or may not send you off for more tests, or they may just offer a script for some drugs. Interestingly they complete that script with a pen from a drug company that visited them recently, nothing is disclosed around why that particular drug over any others. The advice you get isn't in writing. You aren't told what were the alternative treatments considered or why they were discounted. You aren't advised if there are any conflicts of interest or what remuneration is paid to the doctor for their advice. You also see that the doctors qualifications are over 25 years old but you trust them as they have 25 years of real life experience. FASEA is a joke, but this analogy shows the true insanity of the layers or regulation financial planners put up with on a daily basis.

Can we get some context from Phil as to why he considers a doctors pathology referral would fail standard 3? This discussion requires more than just opinion or an assertion that is not backed by evidence / logic. Without the latter some in our profession will continue to be seen to be emotionally protecting self-interest and this harms us all.

Hi Richard, I suspect the issue around referrals is not FASEA so much as RG175.321. "If an advice provider does decline to provide the advice, they may refer the client to another advice provider .... as long as this referral is not, in itself, personal advice. A referral will be personal advice if it is financial product advice and the advice provider has considered one or more of the client’s objectives, financial situation and needs, or a reasonable person might expect the advice provider to have considered one or more of these matters:" So if you have considered any client personal information you would not be allowed to refer the client on to an expert for financial advice - according to ASIC.

Pretty sure the Doctors don't own or get payments from them....Perhaps these bodies, particularly the FPA have told so half truths they now believe an example....What about an industry association that claims to represent Doctors yet gets payments and members from the Drug Manufacturer and apply the FPA to an analogy, allows Pfizer..."to help shape the direction of health in Australia".....

These bodies don't know what a conflict of interest is because they're still living in 2009. ...Perhaps they'll appreciate this. What about a medical association that makes a deal with the Drug Manufacturer Thalidomide, requiring all subscribing Doctors to members, in return for both Thalidomide and the Medical Association issuing a press release saying it's not Thalidomide fault it's uneducated & unethical Doctors. Implying they are improperly issuing the Drugs to the wrong people and we need to lift education standards. Then that Medical Association also charges a fee for Education approval and "gifts" that process to the new regulator? Bit like the CBA Advice Scandal that lead to FASEA.

For full context please see the LinkedIn post.
To understand the point I made, you need to read the following line in the Annual Report of a listed pathology group:
"Payments to doctors in medical centre and occupational health businesses in exchange for contracting the Group’s services for a period of time are capitalised as a contract asset and amortised on a straight-line basis against revenue over the life of the contract."
So seemingly pathologists pay doctors for agreeing to use their services. That would appear to be a conflict of interest.

Thanks for the context Phil and I have empathy with your position. A close relative is an audiologist and whilst she doesn't work in hearing aids specifically the vertical integration, volume bonuses, commissions, soft dollar benefits, and conflicts in that medical specialty are even more breathtaking. However just because other professions take the self-interested road doesn't mean we have to? Maybe the best / only way for the profession of financial planning to regain the public trust is to set the bar higher than the other professions and allow some time to pass? Quality financial advice is valuable and consumers will pay for that value.

This is exactly what I thought as well. Conflicted referrals, pricing beyond the normal, no limits on cost to patients (regardless of their situation) just because their insurance will pay. And dentists, doctors, etc NEVER put their recommendations in writing, nor the pros and cons. And when procedures go mad (like my dental issue), you have to go to court since Dental association or HCI or Dental board, all turn deaf ears when you complain.
In contrast, most Advisers today (thanks to the bank and AMP mainly) as subjected to the harsh never ending subjective laws.

you actually demonstrated the nub of the issue. I am actually a professionally trained accountant and still a member of one of the big three professional accounting bodies (CA/CPA/IPA), ( I shan't mention which) but a practicing financial planner, fully fasea compliant.

there is a myth that exists that financial planners get a lot of complaints, in fact, this couldn't be further from the truth, very few financial planners get complaints.

the accounting profession gets a lot more complaints than financial planners I see this every month in the internal magazine sent to members and others by subscription but the complaints are managed by the professional bodies, and most are dismissed and or quietly managed with the profession applying sanctions, education where needed.

we have adele Ferguson and everyone else screaming at the top of their lungs in every newspaper and magazine. about the ROGUE financial planner :

a. who sold his mother

b. who sold his mother and father

c. who jammed somebody real good

d. stole $20m then jumped off a cliff

e. stole from the client's smsf and went overseas

if you keep on plastering this news in the paper every day, and in magazines and on television then, of course, the public will think financial planners = scammers and why everyone thinks accountants are trusted advisers. I get more complaints from clients about accountants than any other professional.

so the perception of financial planners is bad, but the reality is that other professions receive so many more complaints.

I think in the past year the AMA received nearly 10,000 complaints about doctors. but everyone thinks Doctors are some Gods, and highly trained really? with a bachelor's degree at AQF 7?

I'd say financial planners would get about a dozen or more. even afca laud the small number of low complaints about CFP practitioners.

the trouble we have as a profession is that we have ASIC, and the poisonous minds who sit on its external advisory committee, plus the big institutions advancing this false narrative at every opportunity they get. then we get the dealer group people who do the same so to advance their vested interests.

as Hitler said if you tell a lie 1,000 times it soon becomes the truth.

we have to manage our reputation better, I wish the AFA and FPA used their $20m to take out ads against any journalist and aggressively combat these perceptions by taking legal action. anyone says any negative untruths (unless it is the truth) we sue them for defamation.

$20m goes a long time, you will get all the leeches from the top-tier law firms doing the FPA and AFA's rounds to take on everyone for us.

until we bankrupt these people and make them scared to death they will keep abusing us.

peace out. m fin plan qualified cfp fasea passed adviser

financial planners are seen as equally bad as murderers and viewed and held in contempt by the community and stakeholders, that's what the instos tell ASIC and the government, and the dealer groups tell the government and ASIC and the external advisory committee of ASIC tell ASIC and everyone listens to them.

and the media plays to that and everyone enjoys having a laugh at our expense. well, I am sick of it. so let's get to war I say and that's not proving our worth over time with clients who have experienced our service and give us a very high rating.

by that, I mean in a very combative and aggressive way.

what you've witnessed is the benefits of self regulation... The Royal Commissioner had the FPA on the stand and said as an industry we're incapable of self regulating and so we've ended up with an external code monitoring body.

time to exit. sometimes the herd is right.


Gosh, imagine being able to hold other professions accountable like that - advice in writing, listing pros and cons, the alternatives treatments and the liability that comes with the advice years and years later. There would be an uproar

What happens when you allow the ISA to control most of the lobbying in our industry to increase intra-fund "advice" & to hammer real advisers. You get screwed.

It is a silly analogy but I was thinking the other day how funny it would be if doctors had to present statements of medical advice and not receive a cent from anywhere but their clients pockets. Maybe drawing some parallels (better ones) is important in bringing some sanity to regulating our industry? Just food for thought

I actually like the statements of advice and the record of advice it's very nice and professional. no one else does it so we are better than everyone else in that regard. I don't think the stakeholders wanted it to happen, though, as a result, I am actually more qualified than all other professionals and my process is so much more robust. I think they were trying to kill me but I have survived to thrive and now I am the best, better than all the rest, better than anyone, any other professional I have ever met.

I think what many in the financial planning industry in the future will find irksome is bumptious financial planners like me telling them all how good I am and they know it, and they can't do anything about it (because it's true), and I am gonna shine, like a diamond shine like a diamond and there is nothing that they can do about it, and it will piss them off.


dream on Ciao. The vertically integrated tied agent intra-fund marketing reps are going to drill you to death.

No I dont think so, planners like ciao have good solid books of loyal clients, they have nothing but blue sky ahead. Those reps will look after all the small fry, thats fine, they can look after all the amp orphans too. There will be maybe 15,000 advisers left in a year, at 200 decent clients each on ongoing service and the ability to maybe see 50 more per annum , it leaves a lot of people for the tied agents and the barefooted people on tik tok to look after. The market has already proven we are in really high demand people come to us, the tied agents just sit there being paid sneakily from admin fees doing sfa and doing peicemeal advice like switches, they could never compete for decent clients on a open playing field. Good luck ciao.

Good for you man, good for you.

bumptious I like. I had to google it to know what that word meant. nice one ciao, we wuv you chow.

they medical professionals have to prepare discharge statements when you leave hospital after treatment. They can be fairly detailed.

Add new comment