Good advisers embrace ‘spirit’ of law
The financial planning industry doesn’t necessarily need any more laws, but if advisers had not only abided by the laws that already exist and the spirt of those laws, instances of fee for no service are most unlikely to have occurred, according to Synchron compliance manager, Michael Jones.
In a column to be published in Money Management, Jones pointed to the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and urged that more people follow the rules that are already in place an “apply common sense and ethics to areas where the rules run out or become fuzzy”.
“That’s why ethics and behavioural finance are such a big focus under professional standards, and such a big part of the training we’ll need to do for FASEA [Financial Adviser Standards and Ethics Authority],” he said.
Jones said he believed it was important that advisers understood why they needed to follow the rules, in circumstances where anyone working in a compliance or legal role had heard phrases such as “show me in the law where it says I can’t do X”.
“That is where recognising the spirit versus the letter of the law, and the use of judgement, come into play,” he said.
Jones said that while the Corporations Act may not actually state “if you sign an agreement with a client to provide services for money, you should actually provide those services” it was self-evident that this was required.
“While it may be technically legal to act in certain ways and do certain things in the industry, some of these are simply the wrong thing to do,” he said.
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