Referencing misconduct by an individual Westpac adviser, counsel assisting the commission Rowena Orr asked the bank’s representative, general manager of BT Financial Advice Michael Wright, about Westpac-aligned advisers’ mandatory membership of the FPA.
Specifically, Ms Orr asked whether the advisers’ membership presented another avenue through which to address instances of poor conduct.
Mr Wright clarified that this was not the case, and that the bank does not report specific advisers’ misconduct to the association.
“Why would you require your advisers to be a member?” Ms Orr then pressed.
Mr Wright said the FPA membership policy was intended to help professionalise the advice industry.
The adviser in question, Krish Mahadevan, also holds the FPA-run CFP designation.
When asked by ifa whether the FPA will investigate Mr Mahadevan’s conduct, or whether any action will be taken against him, the association said it would “not comment on an individual or matters currently under review by the royal commission”.
ifa’s rolling coverage of the commission’s public hearings on financial advice can be followed here: https://www.ifa.com.au/strategy/25404-royal-commission-financial-advice-hearings-live-blog
The Classic & standard FPA line:
[i]When asked by ifa whether the FPA will investigate Mr Mahadevan’s conduct, or whether any action will be taken against him, the association said it would “not comment on an individual or matters currently under review by the royal commission”.[/i]
When asked about (insert FoFA, insert FASEA or Opt in, LIF) the association said “let’s wait and see… and after the matter….”we just need to move on”. It’s a classic line when you’re paid by banks. Anyone else notice they make statements after the banks say something and it’s usually agreeing?
Banks + AMP.
I work within the advice arm of one of these instos, and I can tell you that the best outcome here is for wealth and advice to be seperated from the banks, they want the biggest return without ever investing a single dollar into the infrastructure of their wealth divisions, I feel for the execs who are limited by the resources they have been provided by the banks, lack of adequate staff, centuries old back end systems. Financial advice is soo necessary for Australians, but unfortunately it’s becoming less accessible as costs of producing the advice continue to increase.
I also don’t believe self license is the answer for the smaller advice firms, I’m looking forward to a clean up of advisers so the shift in culture can finally start to occur.
I hope advisers continue to focus on their clients during this turbulent time, they will be the ones deciding if they should continue receiving the services you provide to them. I understand it is tough right now, but now is the time to truely stand up and show your clients why they engaged with you in the first place.
We always talk long term goals to clients, so perhaps set some longer term business goals that are driven by client engagement, and not solely revenue growth.
Finally, best wishes to those great advisers out there serving the community, don’t forget the positive impact you’re making to clients lives.
To the advisers who go to bed with a guilty conscious… There is always Uber driver for your next occupation.
well put. until this structural deficiency is addressed, there will continue to be problems.
this must be addressed first before anything else
self licensed is not the total answer but that is an answer to many of us
I don’t understand how FPA members are angry that certain individuals are not kicked out but are quite happy for their association to continue to accept the licensee like CFP & Westpac still.
Let’s just remind FPA members of the relationship between Westpac etc and the FPA…again….(1) As stated on the FPA marketing material… [i]You work in partnership with the FPA to shape the future direction of the profession through a close working relationship with the FPA executive team[/i][b][/b]
(2) the fees they pay are bundled up and reported as “member fees” on their annual report.
Do we really want these firms shaping the future of advice? Are you happy to have these firms “members” Your CFP is worth ZIP.
The FPA and the AFA are just the Morals Mafia. Both are guilty of colluding and taking advantage of this circus situation around the FP industry.
Both are guilty of appalling ethics and standards. Why should their membership be compulsory? Why? No one can really say it’s of real benefit. You can bang on all you like about standards and education but both these corrupt bodies will keep secret and never comment on how every single rogue firm and every single bad egg adviser was a member.
The royal commission needs to stop this ludicrous membership requirement and allow the FP industry to cut what is just another ridiculous cost and compliance burden from their industry.
Goodnight FPA. I really hope you die by the sword you have swung so hard over the years. You deserve to be abolished and abandoned. Can’t wait for your ridiculous regime tone exposed for what it really is and for what it really has done to destroy an industry that did not need another leech sucking it dry.
Oh Gosh, I’ve used that word naughty word “independent” in my headline, even though I have been non aligned to any insto since I started my career back in the mid 90s. Better not use it again, otherwise ASIC will stalk me and try to hound me out of the industry. Good thing the banks can’t use that word either. Just imagine the untold damage they could do to their customers and reputations if they were able to use it.
Being a self confessed Star Wars tragic, I can’t help myself by repeating the rather tense conversation whilst Governor Tarkin was questioning Princess Leia into giving up the location of the rebel bases in Episode IV – A New Hope – 1977.
Leia’s response was: “The more you tighten your grip, Tarkin, the more star systems will slip through your fingers”.
Is anybody listening? How many inquiries and so called tightening of regulations has there been in my career? It’s a ridiculous farce. And where has it got us? The more the pollies tightened it up, the more the banks slipped through the fingers of the regulators and politicians…lying, cheating and stuffing their pockets full of money, laughing all the way…for years. Now the banks will exit the industry & leave us poor schmucks with the legacy of the government’s usual clumsy attempts to “tighten it up” yet again. Oh, and let’s not forget that the Gov/FASEA ideas around qualifications will help here. I have no doubt the will be no more lying, cheating and gouging because advisers will be highly educated…too right…they’ll be smarter and be able to hide it better.
There should be a Royal Commission into the ASIC and Chapter 7 of Corps law…both are severely dysfunctional. Better still, pull the whole useless edifice down and start again. Rebuild it with help from experienced non-insto based planners…they’ll do a much better job of it than the pollies who have no idea as evidenced by their years of egregious attempts to patch it up with used chewing gum, paddle pop sticks and tissue paper.
Governor Tarkin (FPA), I should’ve expected to find you holding Vader’s (AMP) leash. I recognized your foul stench when I was brought on board.
There two tiers of members at the FPA:
1. Big Banks + AMP
2. Others?
The first tier (big banks + AMP) are responsible for the massive increases in PI cover in recent years due to their misconduct impacting tier 2 members!
I may have missed something. FPA has nothing to boost about as many of their degree-qualified/ CFP members I suspect are embroiled in the current Royal Commission findings on banks/ AMP wealth management; i.e. not acting in the best interest of the client. For FPA and the other industry associations to be taken seriously, they need to act on their Code of Conduct and expel every financial adviser in these organisations who failed to act in the best interest of the client. This is the sign of professionalism and I suspect would win trust with the public. Yes, I know this would be a big ask as it would directly impact FPA’s and others cash flow.
The FPA needs to expel Commonwealth Financial Planning…or at least end the professional partner program.
May need to separate FPA from CFP….
Isnt the real reason for joining the FPA to avoid completing the education requirements for the Tax Practitioners Board???????
That was another con that the FPA argued for, in order to maintain members. The course costs you $1,050 (total), so in one year, you do the course and then don’t need the FPA’s horrific disjointed membership
Lets not forget that compulsory membership was the deal done by the AFA and FPA with the FSC to go along with the con job that was the LIF. Wouldn’t mind seeing the FSC on the stand to explain how this came about. As for the FPA or AFA for that matter being classed as “professional” associations what a joke.
If the FPA doesn’t give CFP ( those of us that studied) a pathway to FASEA that is fair, then good bye!! FPA and this will be the end.
Commentariat continues to ignore the core problem which is aligned advisers cannot both serve their masters and place their clients’ interests first (fiduciary duty). The only path forward is 100% IFA’s
Exactly, until ASIC / Govt enforce the separation of Advisers being owned by product manufacture’s then we will continue to get these conflicted advice results, fee for no service and mountains more regulation and red tape, that we are all drowning in to try to help the banks survive vertical integration’s inherrant conflicts of interest.
And the same conflicts exist in Industry Fund advice offerings too.
Totally agreed. But don’t forget to include accountants who provide SMSF admin services as well. For most accountants SMSFs are an inhouse product that drives conflicted and inappropriate advice.
A SMSF is an in house product, really? I wonder if you consider that any different to the planner who recommends a platform or managed account so that the planner can ‘manage’ the portfolio’ for the customer. Surely you must consider that as an in house product as well then.
I’m starting to think the Commissioner agrees.. but I do caution that it isn’t the silver bullet for all the ills of the profession, and will, by default, increase the average cost of advice.
It just looks like the FPA is in bed with the CBA. Why would you want to create that impression? Bizarre. Surely if you wanted to look professional you would want to be quite separate.
Yep, the FPA is right to insist that membership of the FPA is of great benefit to consumers because it has such high standards of ethical behaviour. Riiiiight.
CFP. Gold standard for ethics, professionalism, and advice, huh?
Westpac, Commonwealth Financial Planning pays for FPA members fees in bulk. The FPA turns a blind eye to the conduct of these organisations because of 1) the fees received via the professional partner program and 2) additional members of course.
The RC is implying the FPA should of been notified and suspended these bad advisers yet how does the FPA actually treat members like NAB (accused of bribes) like CBA/CFP (accused of charging clients fees for no service) and AMP (making false statements to the RC)
The FPA is not going to stand up for our brothers and sisters in these organizations when they’re getting payments.
The FPA is never ever going to be taking seriously by Treasury and certain not by FASEA now when when there members like CBA are on the payroll.
The FPA was opposed to the RC because the banks at the time were also opposed… go figure.
The FPA supported CBA when they came out blaming planners for poor advice and called for Degrees for all. As opposed for defending planners. Now we have FASEA
The FPA is out of touch, living in the 80’s and it must stop if we are to prevent Red tape and over regulation.
we have red tape and regulation.. the question will be how much more red tape and regulation can we take before the business becomes impossible to work in?!