FASEA board accused of shunning industry

The board of the Financial Adviser Standards and Ethics Authority (FASEA) is under pressure to explain why it has resisted engaging with the financial planning industry for nearly two years despite persistent overtures from the major organisations such as the Financial Planning Association and the Association of Financial Advisers.

Questions are being asked about the level of engagement on the part of the board in circumstances where, for the first time, at least some board members were present at last week’s “consultation” around the FASEA code of ethics.

However, it was noted that while some board members were at the consultation alongside at least some ministerial staffers, the chair of FASEA, Catherine Walter, was not present.

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FPA chief executive, Dante De Gori has confirmed to Money Management that his organisation had written on numerous occasions to FASEA seeking at least some level of engagement with the board but had on every occasion been referred to the executive.

He said he found the situation puzzling in circumstances where Australian Securities and Investments Commission (ASIC) commissioners and members of the Tax Practitioners Board (TPB) had a long tradition of engagement with the industry.

The level of the FPA’s frustration was evidenced in a recent formal statement over FASEA’s handling of code of ethics guidance when it publicly bemoaned the long period of isolation on the part of the authority’s board.

“After two and a half years, the FASEA Board of Directors has yet to consult with any financial planning professional bodies or their members and they appear to be more interested in academic theory than making a genuine effort to improve standards in the financial planning profession for the benefit of consumers,” the FPA statement said.”

It said that, among other problems, FASEA’s Code clashed with the Government’s Royal Commission Road Map, released only two months ago, and the grandfathered commissions legislation passed by the Parliament two weeks’ earlier.

AFA chief executive, Phil Kewin said his organisation had been similarly declined access to the FASEA board, notwithstanding a former AFA president be a member of the board alongside a former FPA chairman.




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Is it true that the Banks fund FASEA? Is this just another of their tools to destroy IFA's?

yes, the big 4 and a handful of others - bit like the FSC running the funding.

ABA actually - they didn't trust the FSC near it.

Catherine Walters in the first instance should resign! When was her last public announcement? What does she actually do to earn her remuneration of $168K. Her name is on a handful of documents and that's it!!"Fee for no service"? She would breach FASEA's own Code of Ethics under a number of Standards. Why has she allowed the Code of Ethics Guidance saga to drag on for 8 months after the industry was promised it would be released "shortly" after the Code of Ethics back in March 2019. Why has she refused to consult with the heads of the professional associations, let alone licensees on the development of the CoE Guidance? How is it she signed off on the CoE Guidance that is anything but, going by media reporting of industry feedback to date. However, one does feel for CEO Stephen Glenfield as he is the one copping the heat from the industry, yet the Board (excepting Deborah Kent Louise Lakomy) remain "invisible". It's time for the likes of Walters, Brimble and Longstaff to be accountable.

Not to mention that she is also a director of AFIC, which is a funds management and product business. It is an abomination that the government has allowed both representatives from product providers and universities on that board, given what the board does, and the standards they impose. Utterly disgraceful. How can a person who makes money via product distribution of financial products be entrusted with the role of chair for this ethics authority, what right do product manufacturers have to dictate to us about ethics? Products are as much of the problem as advisers and anyone involved in the manufacture of a financial product had absolutely no right to have a seat at that table and the industry should've gone insane over it. Similarly nobody who represented a university which stood to make millions of dollars from selling education should've been allowed anywhere near that board. The board is so toxic that we are now in a position where the ethics of a board who sets ethics is in question and it should be totally beyond reproach, they set ethics for gods sake.

Well Glenfield was also the APRA person overseeing and taking IOOF and Kelaher to task, but that was then seen to be wrong and overthrown, so perhaps he carries a bit of an anti-advice grudge as well. It is a conflict - anyone who came out of the RC must still be effected in some way as to their views depending on how they were portrayed by it.

It's not just the Board who are uncommunicative. My licensee and I have written to the executive team many times and heard nothing back. Time to practise what you preach Stephen, Amelia and Howard!

Well there was a lot written and said about Catherine Walter on the request of the NAB board to stand down as a Director including public comments from the Chairperson , such as 'that Mrs Walter failed to cooperate with the investigation into irregular foreign currency options trading, in a manner that was acceptable to the board'. So depending on what she has learnt since then, it remains to be seen whether she likes fronting up to be asked questions. Is it possible she was one of only a very few who actually put their hand up for this poison role?

If thise level of incompetence by ASIC and FASEA (closely followed by the government) was ever perpetrated by an authorised rep they would be run out of town and pilloried.

The most damning criticism in the article was bang on "...appear to be more interested in academic theory...".

The whole board should resign. They accountable for the successful implementation of the code. It cannot be implemented as it is, let alone succeed. They have failed. They are incompetent - all of them should go.

How much longer is this complete circus act that is FASEA going to be allowed to go on? Its a standards body, that cannot even abide by basic professional standards, its conflicted, opaque and has staffers and a CEO that do not even know the 5 values of the Code of Ethics. Its clear that the longer this debacle drags on, the deeper the hole FASEA are digging themselves. The whole body needs to be disbanded and started again with workable solutions that achieve the true spirit of becoming a profession and not just trying to put pieces of an unmatched puzzle together, which FASEA are trying to do based upon ideological legislation. Sadly not enough advisers are speaking up about this debacle, but i'm sure many will next year when they start having to pay a FASEA levy as the current funding dries up. Its not about shunning standards, its about getting them right and workable to benefit clients!

The lack of communication demonstrates the board doesn't really understand the industry they are attempting to introduce a code of ethics too and aren't confident in the direction of their organisation. Such behaviour does nothing to inspire trust or confidence.

Don't get angry with FASEA, get angry with the FPA. Let's get this straight, professional financial planners are no longer members of the FPA. Thank God FASEA has not liased with FPA. If FASEA listened to the FPA, advisers with a Bachelor of Commerce and those with a Masters of Financial Planning prior to 2009 would be needing to do a whole Grad Dip right now. The FPA gets funding from product providers and the majority of it's members work for Banks and AMP who pay for their memberships fees...the FPA is not representative of the broader financial planning community and the only people the FPA looks after is themselves. $10 million sitting in cash on their balance sheets is evidence of this... and being called out at the Royal Commission justifies them being ruled out of the process. An AFR journalist even accused the FPA of remaining silent during the CBA advice scandal in return for the promise of new members. Give FASEA a break and start asking why the FPA is in the pockets of the parties dragged before the Royal Commission.

Adam, you are factually incorrect on a number of counts. Nonetheless the FPA should be taking notice of your ill informed rantings, not brushing them aside. The FPA's credibility as a lobbyist is severely hampered by the perceptions of people like you. The FPA needs to be whiter than white in order to overcome its credibility problems. Get rid of the "Professional Practice" program. Get rid of discounted fees for individuals licensed by large institutions.

...Adam is right on some things...namely that FPA are soft lobbyists and that doesn't work at all. Get rid of the professional partners program too and stop charging ridiculous fees for educators to get their programs accredited by you...as if an association knows more about quality assurance than a higher education provider...spare me please!

I'm with Adam. The FPA are conflicted.

I met with my local MHR ths week and received a good hearing and even sympathy. Each and everyone of us who own and operate a financial planning Practice should do the same. The Politicians need to be made fully aware of not just the FASEA debacle, but also clients being disadvantaged by Centrelink if they are moved from grand-fathered products, how Protecting Your Super has caused insurance claims to be denied, mental health of industry participants, practice devaluations, the AMP saga............. where do I stop?

I understand that Stephen Glenfield has responded by saying " the guidance around the code was subject to change but the code itself is not"
However, Part 1 of the FG2002 Code of Ethics 2019 Guidance document clearly states on page 5:
" The Code is a living document SUBJECT TO CHANGE "
How on earth can the CEO of FASEA state the code itself is not subject to change when the guidance document says the code is subject to change.
This is further evidence of incompetence and lack of understanding or it is simply a desperate bid to preserve what is left of a sinking ship and to continue to fight in the face of what is right and ethical.
This is a clear contradiction and this process is now completely compromised.

Good call Agent 86! You have raised a relevant point. However the Code itself is legislated, so any changes would require a legislative amendment. Phil Anderson from the AFA did note that changes were made to Standard 3 that were not included in the 2nd round of consultation ion November 2018, hence when the legislative instrument & EM came out, there was a "surprise". This is partly why its a mess at present and FASEA's Guidance have confused & surprised many the industry.

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