Industry Super Australia’s (ISA) efforts to derail the Future of Financial Advice (FoFA) amendments have brought into question the fundamental integrity of the financial advice profession, according to the Association of Financial Advisers’ Phil Anderson.
Speaking at the Sydney leg of the AFA’s Adviser Roadshow series, Mr Anderson said the advice profession had been subjected to a “very deliberate, very considered campaign of misinformation and misrepresentation” by the ISA.
“The FoFA amendments debate, as it has played out, has been very destabilising for the financial advice profession. We’ve seen stories that have very much brought into question the fundamental integrity of our profession,” Mr Anderson said.
He told attendees that the ISA’s FoFA messages had been further compounded by the results of the Senate inquiry into the Australian Securities and Investments Commission’s (ASIC) handling of the Commonwealth Financial Planning (CFPL) advice scandal.
The FoFA amendments debate has been very destabilising for the financial advice profession
“That has brought up a range of difficult and disturbing issues that have had huge media coverage,” he said.
“The FoFA amendments and the Senate inquiry into ASIC and CFPL have both had a huge impact upon the mainstream and public perception of financial advice. It will take some time to solve this problem.
“But we are certainly going to work towards that.”
In order to help the advice industry raise consumer perceptions, the AFA has launched its Six Principles of Professionalism.
The AFA used its national roadshow series to launch the Principles, which will form the centre of the Association’s revised Code of Conduct. The Principles set out the minimum professional practice and ethical standards for members of the AFA when providing financial services.
They are:
- Integrity and Professional Conduct – Act with the utmost integrity which encompasses the highest standards of professional conduct, honesty and ethics.
- Best Interests – Act in the best interests of your clients in seeking to extend and secure their financial wellbeing.
- Conflicts of Interest – Do not allow conflicts of interest to influence your actions inappropriately. Always place the client’s interests before your interests.
- Informed Client Consent – Educate your clients in financial matters and help them to understand the decisions that they are making.
- Service Standards – Provide professional service that is aligned to your clients’ circumstances and your agreements with them.
- Professional Expertise – Strive to achieve high standards of professional expertise by maintaining and improving your knowledge and skills, and those of your staff.
AFA CEO, Brad Fox, said the Principles had been developed through consultation with a group of experienced financial advice executives and advisers from across the industry.
“This process has built upon the draft Principles of Practice document that was issued for consultation in 2012,” Mr Fox said. “We are thankful to the advisory group for their outstanding contribution and rigorous debate which greatly assisted in the development of these six principles.
“Early indications are that our members see the Principles of Practice as appropriate and practical in terms of language and application.”
He added that the ongoing legislative and regulatory debate had delayed the development of the remainder of the Code of Conduct.
“We are continuing to refine the Code of Conduct in the light of ongoing changes in the legislation and regulation which affect matters, such as the opt-in exemption. With the removal of the opt-in obligation a matter of ongoing public policy debate, this has held up the finalisation of the Code.”
Click here to view a copy of the Principles.
