Unlike flimsy Consumer magazine 'research' on the financial advisory industry that was gleefully reported as fact, the real reforms facing the industry have been strangely ignored by the mainstream press.
It's not that strange, I suppose, sifting through proposed regulations is tedious, extremely so, whereas working up headlines based on
a mud-slinging report is a pleasure
Interesting to note that in the latest consultation paper emanating from the committee writing the financial advisory regulations, there is a suggestion that the "Code include a good conduct standard which restricts the ability of AFAs [authorised financial advisers] to criticise other AFAs".
Yes, let's just leave the criticism to people who don't understand the business. Furthermore, if this clause does get incorporated into the final adviser Code it would severely restrict my ability to write news.
My minor quibbles aside, the Code Committee paper, carrying the awkward title 'Proposed minimum standards of ethical behaviour and client care for authorised financial advisers', is a comprehensive document with some hefty implications for how the industry will operate.
For instance, the proposals place heavy restrictions on the use of the term 'independent' and go even further with an, absurd, suggestion that advisers should declare upfront that they are 'non independent'.
The paper confirms, too, that the banning of commissions is on the government agenda.
Thanks to Consumer and the pathetic reaction of Commissioner Annabel Cotton, the Code Committee is now short two members, leaving only one practising adviser in this influential group.
Cotton has said she is "not so concerned" about the downsized committee but it has much work to do in a short space of time.
That pressure might explain why Ross Butler, Code Committee chairman, has squeezed two core principles into one.
"The first principle is that any authorised financial adviser must place their client's interests first and act with integrity," Butler said in a statement announcing the new paper.
Ross must also have been too time-poor to give much attention to the slightly-hyped Code Committee blog, which sadly advises "No Entries".
David Chaplin
