Does history repeat itself?

July 24, 2020Posted inAFSL ComplianceNo Comments

Originally published | 18th October 2017

“Those who cannot remember the past are condemned to repeat it”.  

These words were penned in 1905 by Spanish-American Philosopher, George Santayana.  

But as a society, especially in the financial services industry, have we ever really given this aphorism it’s due?

Do you remember doing history at school?

I loved it, and still do.  To me, learning about history provided me with the way understanding how our current society was formed.  

Do we use the same philosophy in financial planning? I will put my hand up and say I do.

Best Interest Jigsaw Puzzle

July 24, 2020Posted inAFSL ComplianceNo Comments

Originally published | 25th January 2018

We’ve recently seen a lot of action from the Regulator in regards to financial planners not meeting their best interest duty.  This action has seen enforceable undertakings, additional licence conditions and in some cases, banning orders.

It led an adviser I know to recently say to me that “The Best Interest Duty can never be 100% fulfilled because for every goal or problem there are many solutions possible and no one right approach. And hindsight will always be a factor. And ASIC seems to focus only on fees and so we are doomed if we offer any solution where the fees are higher no matter how good the advice or product is”.  

This seems to be a current reaction to any media in regards to this subject. 

What was my answer to this adviser?

May I take your order please?

July 15, 2020Posted inAFSL ComplianceNo Comments

Originally published | 29th March 2018

Some habits are hard to break.

Being a financial adviser/planner (whichever term you want you use) means you are providing guidance and direction to your clients, not simply taking direction from them and placing products.

This seems to be the case mostly with life insurance advice when it appears that advisers are still uncomfortable in having the discussions with the client.

Ethics in the face of Unethical Behavioural

July 13, 2020Posted inAFSL ComplianceNo Comments

Originally published | 17/02/2019

It is interesting that over the last couple of weeks I have read the diatribes of advisers who are bemoaning the changes that will come about because of the Royal Commission. It is interesting that we have yet to fully hear from the Australian Financial Services Licensees (AFSL) that have been caught up in so much of the misconduct.

The reason why we haven’t heard from them, in my opinion, is because they don’t care. These AFSLs are vertically integrated so the advice component is not important to them. The only thing important to them is selling products. And this leads to unethical behaviour.

Compliance culture (Proactive v Reactive)

July 13, 2020Posted inAFSL ComplianceNo Comments

Originally published | 06/03/2019

If you love or have loved comics in the past you will understand the stories of the heroes and the vigilantes.

The heroes are generally those types that come in as soon as trouble happens and save the day whereas the vigilantes are patrolling the streets, generally in the shadows and are ready to pounce on trouble as it happens.

Conflicts Priority

July 13, 2020Posted inAFSL ComplianceNo Comments

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.