Industry concerns that codes of conduct will bring about a financial planning association monopoly are unfounded, the Financial Planning Association (FPA) told InvestorDaily.
“I don’t agree there will be a monopoly of associations and I also think that if you were to ask individuals that are members of these associations, they would probably say they [would] rather one association than multiple,” the FPA’s general manager of policy and government relations, Dante De Gori, told InvestorDaily.
He added that if individuals are members of multiple associations then they must seek or receive different benefits from each.
“In reference to the code, there is an opportunity for every association to have a code of conduct and lodge a code of conduct with the Australian Securities and Investments Commission (ASIC), so that’s not an exclusive opportunity,” Mr De Gori said. “That is actually inclusive of anyone wishing to be part of it.”
In late October, ASIC released its Consultation Paper 191 (CP 191) on code approval, outlining the contents, administration, governance, monitoring and enforcement of codes that would be relevant to advisers and industry representatives who were considering submitting a new or existing code for approval.
The FPA and the Association of Financial Advisers (AFA) both also announced their intention to have codes approved by ASIC.
But at the time, MyAdviser managing director Philippa Sheehan told InvestorDaily that the regulator’s paper will have the adverse outcome of creating a monopoly out of the two main industry associations.
“If we accept CP 191 as it currently is, we’re going to end up with a monopoly of two main associations where we’re going to have to pick sides,” Ms Sheehan said.
“CP 191 is going to make me pick, but I think they both have their merits. It’s going to be no different to dealing with a Woolworth and Coles, and as advisers move from one licensee to another, checking the new code they’ll be operating under will be an [added] step.”
She continued that as an Australian Financial Services Licence holder with 140 advisers, there would be no strong preference for one association over another, which would require MyAdviser to create two or three sets of systems in order to meet the different codes of the associations of which its advisers were members.
“I support the fact that we need a code of conduct of some kind that caters to the broad spectrum of [duties], but I certainly believe that should be at a licensee level, not at an association level,” Ms Sheehan said.
ASIC should be working on CP 191 with a view for licensees to have their own codes and the industry associations should develop guides for creating or improving codes for licensees, she said.
“The FPA, the AFA and the SMSF Professionals’ Association of Australia should help us in the creation of the licensee code and also in the policing of it,” she said, “but at the end of the day, the licensee should be the one responsible for enforcing it and have the systems to control its enforcement like compliance checks etcetera.”
