Originally published | 8th June 2019
If you have been in financial planning since July 2013, you would have some idea of s961J of the Corporations Act. This is the section that deals with conflicts and is often referred to as the Conflicts Priority Rule.
In its basic form, it says that as a licensee or a representative, you must prioritise the client’s needs above those of yourself, your employer or your licensee.
I’m going to throw a curveball in here and this may sound controversial, but has anyone said this to our industry bodies?
Dealing with clients, we all want to do what’s right and in their best interests. I have met very few advisers who don’t.
But it seems to me in my observations that our industry bodies don’t feel the same way about their members.
Whose priorities are they looking after? The adviser who is a member, or the product providers.
I recently had one of my staff contact an industry body to ask about getting some form of bulk discount for our advisers.
The answer spend at least $5,000 as a licensee, and we don’t actually receive much for that but the association will give your advisers a slight discount.
Are the industry bodies more interested in members or fees?
Have these bodies become so oblivious that the people they supposedly represent are questioning whether they should remain members.
I know in my discussions with advisers they are questioning value.
If a client baulks at a fee, it is because they are questioning value. The same is happening with Joe and Jill Adviser. They are questioning the value of membership.
I don’t purport to have all of the answers but the one thing I know is that industry bodies, like government should adhere to principles outlined in the Gettysburg Address:
“It is rather for us to be here dedicated to the great task remaining before us—that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.”
Industry bodies should be of advisers, by advisers and for advisers and through this our industry will flourish.