A former board member of the Financial Adviser Standards and Ethics Authority (FASEA), Countplus chief executive, Matthew Rowe has expressed deep concern about the workability of the authority’s code of ethics unless the controversial Standard 3 is revised.
Speaking during a roundtable in Sydney, Rowe agreed with specialist financial services lawyer, Hillary Ray that Standard 3 dealing with conflicts of interest would either deliberately or inadvertently change the commercial underpinnings of many financial planning businesses.
He said that while he had supported the original Standard 3 which had been taken to the industry for consultation, he did not support the current Standard 3 which he believed would have significant negative consequences for the industry.
Ray had earlier told the roundtable that she believed the nature of Standard 3 meant that the FASEA code of ethics had gone beyond what codes of ethics were generally intended to achieve and that there was now “real potential for financial harm”.
“We are stuck with a fairly draconian approach to conflicts of interest,” she said.
Notwithstanding suggestions during the roundtable that overtures to Canberra about the code of ethics had elicited little sympathy, Rowe said he believed there needed to be further consultation and he would be happiest with a reversion to the original Standard 3.
Comments
A lot of people express concern about a number of the standards and FASEA in general don't they, but nothing ever seems to happen. All lip service! Clearly if Rowe had genuine concerns when he was on the board, either he was too weak to argue logic about this or was too conflicted in his duties as a board member.
Yet Mr Rowe didn't speak up publicly at the time the revised Standard 3 was being considered by the FASEA Board. If this is the case, then what does this say about the ethical culture of the FASEA Board where Board members can't express their views publicly, or rather did the Board suffer from any one of a number of ethical biases in their decision-making? Over to you Mr Simon Longstaff.
So why didn't he speak up publicly at the time? And why hasn't he named the people responsible for changing the code to something unworkable?
And why hasn't Deborah Kent resigned or spoken out? She was there at the time. Does that mean she supports it?
A doctor could not operate under standard 3. If there is ANY conflict the adviser should not act... "Come back for your test results and we'll hit medicare again"
Or a lawyer....charges by the hour...say no more, or 'your chances of success in court are "reasonable" (and I'll get heaps of billable hours hehehe)'.
Or an accountant "yes I could set up an SMSF for you".
Typical academic solution to the real world, they never can grasp the reality of a situation, only the theoretical conflicts.
Lawyers will have a field day with standard 3 with EVERY financial planner in the land. You cannot eliminate all conflicts in ANY profession.
Of course there is NOOOO conflict with academics and educators sitting on the FASEA board, let's have lots of courses, exams and education that we'll make millions on.
If FASEA acted according to the current code 3 THEY COULD NOT ACT.
Idiots.
Rowe was part of the problem. He was there on the board which created the code. If he felt the code was unworkable, he should have said so at the time and persuaded the board from this grave mistake. It is not good enough to roll up to a conference and say the code is unworkable and it requires further consultation. He should take responsibility for this mess that he was part of. Get on a plane, go to Canberra and explain what is going on to the minister. Do the right thing Mr Rowe. There thousands of hardworking Australians relying on you.
Then Mr Rowe failed in his duties as a Director. At any rate he is now conflicted in his views as financial services businessman, so won't be listened to now - he had the chance.
So how does an industry fund planner satisfy FASEA requirements? Surely this also would put them out of business along with any other IFA or planner?
They don't satisfy them as they are an employee of the fund and therefore NOT REQUIRED to satisfy. The Trustee can also charge fees for advice and not deliver - and the member can not opt out.
i am still scratching me head but I believe this is in line with "community expectations". They will get it for sure.
Dear Wondering. I read your comment with interest. Is this in any way related to super fund
employee's not being required to be licenced as a financial adviser?
Licensed advisers employed by union (aka "Industry") funds do have to satisfy all the FASEA requirements.
However most union fund advice is provide by employees who are not licensed advisers. They operate under the exemption that allows general advice by super fund employees. But in practice they provide personal advice, which is illegal without a licence. They fall into the same category of illegal advice providers as accountants, real estate agents, mortgage brokers, and financial coaches. All of whom ASIC chooses to ignore.
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