FPA attacks FASEA for failing to deliver on mandate

The Financial Planning Association (FPA) has accused the Financial Adviser Standards and Ethics Authority (FASEA) of having failed to adequately consult with the financial planning professional bodies or their members for two and a half years.

In strong statement issued today, FPA chief executive, Dante De Gori lamented the fact that the FASEA had issued a code of ethics guidelines without any attempt at consultation.

He said the FPA called on FASEA in February 2019 – and repeated this call on numerous occasions – to provide clear guidance that would help financial planners understand and comply with the Code of Ethics.

Related News:

“Eight months later, FASEA has delivered a document that raises more questions than it answers,” De Gori’s statement said.

“With less than 50 business days before the Code is due to come into effect, FASEA has completely failed both in their obligation to consult and to provide clear guidance on how its standards will work in practice,” he said.

“The process has again been greatly disappointing and completely inadequate, which has produced guidance that is confusing, out of touch and at odds with existing financial planning laws and standards.
 
“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 statement 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 just weeks ago.

“Financial planners and even the public are confused about which standards should be followed – those in the Code of Ethics set by FASEA or those in corporations law set by the Australian Parliament,” De Gori said.

The FPA now urgently calls on the Government to step in, and to recognise that FASEA has again failed to deliver its mandate to consult and deliver, this time with the Code of Ethics and accompanying guidance.

FASEA’s website still claimed that it would release a draft of the guidance document for public consultation before it was finalised, demonstrating the scope of its failure to consult.




Recommended for you

Author

Comments

Comments

If you employ bureaucrats you get bureaucracy!!

An absolute disgrace.
FASEA has failed dismally and now it highlights their distinct lack of understanding.
Their Code of Ethics Standard 3 wording is of significant concern.
This standard alone has the potential to impact the vast majority of advisers across Australia who may be remunerated via asset based fees or insurance commissions ( or in fact, grandfathered commissions ).
Essentially, if standard 3 is not either deleted or completely re-worded, these advisers will not be able to advise any of their existing clients, or any new clients if in fact the remuneration is variable and based on a percentage asset based fee or a variable risk insurance commission....both of which are legislatively acceptable forms of remuneration.
You could not invent a more incompetent outcome from FASEA .
Is it FASEA's objective to ban 1000's and 1000's of existing advisers from providing advice to their clients from 1st Jan, 2020 ???????? simply because they are providing quality, compliant advice and being remunerated using legally acceptable and approved remuneration models ??
An abject failure on an grand scale and the Govt and Jane Hume must now place a halt on this whole process until such time as the complex mess is clarified.

Agent 86, When you say 'vast majority of advisers across Australia who may be remunerated via asset based fees or insurance commissions ( or in fact, grandfathered commissions )'do mean : the natural person who is an adviser OR the natural person's licensee or Corporate Authorised Representative (their employer). The licensee and CAR can still charge asset based fees (there is nothing in the Code that prohibits this). However the natural person who is giving the advice cannot be remunerated (by their employer) in the form of a percentage of that asset based fee / commission. If you are a salaried employee you have no problems.

Whoopee doo, salaried advisers working for product flogging industry funds, the banks, insurance companies and corporates may be ok in some cases if they pay their staff a fixed salary. What about all of the men and women working in small, privately owned practices who deliver fantastic advice to consumers every day? The FASEA Code of Ethics will screw them to the wall by forcing their revenue to be switched off with almost zero warning. I can picture the letter from ASIC already. They will write to every super fund, investment platform, licensee and SMSF trustee and instruct them to turn off the fees and commissions immediately because they conflict with the FASEA Code of Ethics. Game over. Capital destroyed. Jobs lost. Consumers trashed. Families destroyed. INCLUDING MINE. But we can all take some comfort knowing that the product floggers and corporates can still employ advisers as quasi sales staff on a fixed salary, to flog their products without being affected.

and if you're the owner of that business ? as most planners are and charging % based fee.

Here is some of the CV of Amelia Constantinidis, the Director of Standards at FASEA from her LinkedIn profile:
- at AMP 2002 to 2016
- no Financial Planing qualifications whatsoever shown. Holds a Bachelor of Computing Science
- no advice experience shown
- Board & Founding Member of Financial Executive Women (FEW)

I notice a distinct lack of Grad Dip in FP........

this person should have no input into financial planning.

i am telling you, all and sundry, get this through your fat heads. unless you have:

1. 7 years or more experience in an advisory role in financial planning
2. gd dip fp or m. fin plan and have passed the fasea exam or will do shortly or;
3. have other comparable, relevant qualifications in financial planning or a related area (a law degree is not a financial planning qualification)

you have no business in this industry, commenting or otherwise. you should choose another profession like long haul truck driving. it's highly sophisticated field of endeavor. please pursue it.

if you don't and you dare to enter my office as of 1 Jan 2020, the door will be slammed in your face, and you will be told to leave the premises immediately and to never ever come near me again.

thank you,

About time the FPA stood up but too little too late. ALL ADVISERS MUST NOW AGAIN TAKE MATTERS INTO THEIR OWN HANDS BECAUSE OUR """PROFESSIONAL BODIES "" NEED A PILL TO HARDEN UP. START ANNOYING LOCAL MPs AGAIN IF WE HAVE ANY CHANCE OF GETTING IT RIGHT and start today.

goodluck. Be interested how you go with your local member...

My local MP Ross Vasta will not even comment on FASEA.
Poor form Ross. Poor form.
Thanks for not standing up for your local constituents.

My local MP has never used the services of an adviser because they get advice from their accountant.
Pull your finger out and go and educate them or we're gone

If any MP has the courage to stick their neck out against party lines they will be crucified.
Politics is about 2 things only.......power and survival.
Everything else that comes along during a term is addressed from a political survival perspective, 2,3 and 4 years in advance.
Unless you find a strong and courageous independent who are governed in their own mind about right and wrong I dont believe we have any friends other than Bert van Manen.
Anyone else who has never been involved with or never utilised an adviser will not understand the first thing about any of it and will not care.
It will be politically unpopular and if that means losing votes, it will be off the table.
The Liberal Govt used to be the party for small business and now they do not care one cracker about the survival and viability of financial services small business.
As long as Scott Morrison can make it to his happy Hillsong gig once a week, that's what matters.

Half what you said made some sense but your lost me when you took a weak swipe at scomos personal life. Blame the media, and social media activists if anything. Any pollies try’s to show courage and they get hammered by twitter, where MS get their stories from.

This is what happens when you put academics in charge.

Those who can, do. Those who can't, teach...

Spot on FPA. FASEA is completely out of touch with real consumers. They have gone rogue. They are abusing their power. FASEA is overriding existing laws with their own ideological zealotry. The government needs to step in and stop them. The elected parliament makes laws, not unelected bureaucrats.

Its time for FPA to crack open the $20m term deposit and get the best Constitutonal QC to get in there and kick some legislative makers arses and sort this out now. 50 days will be too late.

$20mill TD? Do tell more - I am a CFP and have never heard about that...

Read the annual report. They have $6.5m in cash and a $10m Term Deposit. Gotta keep this available to keep paying the $6m in annualised salaries to achieve nothing for the industry once people finally cancel their memberships.

i had predicated a mass cull, of more than 70%. unfortunate, but gonna happen. many thought including asic and others that it would just be a blip.

fact is, the legislation, framework, code of ethics, is ideal, but hard to deliver all that in practice. so no go.

bye bye financial planning sweet dreams

Too late FPA. FASEA wont listen to the FPA or AFA because nobody else does.

Several issues here: Firstly, look at the funding of the FPA and clearly you're in breach of the code if your an FPA member and you use financial products. It's a conflict. I have a certain expertise in Financial Services Law and after reading the Code that's my interpretation.

Secondly, seems like the majority of FPA planners actually want Dante to resign. He's feeling the heat.
Thirdly, The FPA was "incapable of being a code monitoring body" were the words used. Their business partners, the institutions that they get funding from, were also found wanting. Now does the Judge or Government consult with the criminals when determining sentencing....NO? Let me give you an insiders tip. Last I looked the Law Society of NSW gets payments only from members, graduates and past retired members, and the fact you guys are still asking a body to represent you that receives payments from bodies held wanting at the Royal Commission, well it's not a good look. That's why you're not being consulted .

good points adam. why don't they just give up the professional partner program and just make it a body representing financial planners. a lot of ethical planners would happily t join then, but until then no way.

Yep, the "Professional Partner" program has to go. Dante claims that corporate membership of the FPA ceased several years ago. But the Professional Partner program looks and smells like a back door means of corporate control. It makes Dante's protestations sound like weasel words.

Regardless of what the Professional Partner program really is, the negative perceptions of it are undermining trust and credibility in the FPA. For that reason alone, it needs to be terminated.

Hi Adam, you make some interesting points.
As you have some legal knowledge around this, do you feel FASEA has the ability to turn off life insurance commission without breaching the Constitutional Rights to do it on just terms and payout all the affected planners?
It would appear that this FASEA Code of Ethics is separate to the grandfathered legislation that specifically said that part of the Constitution does not apply to Grandfathered Commission, be that valid or not.
Interested in yours or anyone's thoughts.

As I understand it, FASEA has no enforcement powers of its own. But it does have enormous power to create rules which other agencies are then compelled to enforce. One of the great absurdities of the current system is that FASEA's unelected bureaucrats can create rules which contradict the law, and the enforcement agencies are then compelled to enforce parallel but contradictory regulations.

Add new comment