Earlier this year, FASEA released the draft Code of Ethics for financial advisers and announced that all advisers, regardless of their academic achievements, would be required to complete a Code of Ethics unit to meet the qualification requirements.
Within days of the code’s release the Cricket Australia ball-tampering scandal made headlines. While I must confess I have little interest in cricket (I have only ever been to one game), I have been intrigued by the situation. As it continues to play out before us, I can’t help but reflect on the insight that it provides into human behaviour and how we can use this knowledge to ensure the ethical conduct training advisers are required to complete does more than just tick a box.
Research would suggest that most people don’t consciously set out to engage in unethical behaviour. While we all want to believe that we are ethical and adhere to our values, evidence shows that under real-world pressure, such as a boss demanding an immediate result, even the most ethical and compassionate people can be persuaded to betray their own values in the face of a challenging situation. Our actions don’t always reflect our beliefs and values.
Our inability to do what we know we should can generally be attributed to one of two factors:
1. The bystander effect. This term is used to describe a phenomenon in which the presence of others discourages an individual from intervening in a situation; and
2. Ethical fading. An erosion of the ethical implications of our actions and/or decisions from our minds, that allows us to engage in or condone behaviour that we would condemn if we were consciously aware of it.
In the case of cricket captain, Steve Smith, it’s alleged that he had knowledge of a potential plan to tamper with the ball and while he expressed his dislike of the plan, he did not attempt to stop it. From the sidelines it’s easy to criticise his decision. Surely as the captain Smith had both the responsibility and means to shut the idea down. Yet for one reason or another he didn’t.
Smith’s actions remind us that it takes more than a title and a well-articulated artefact to encourage ethical behaviour. For the most part we know right from wrong and we genuinely believe that we would make the right ethical decision if push came to shove.
Consequently, a truly effective ethics program needs to go beyond hypothetical scenarios. It needs to help participants identify and get comfortable with their fears and then teach them how to tackle them. We need to ensure that when advisers find themselves being asked to do something that goes against their ethics and values, they know how to recognise the situation for what it is and have the courage to respond ethically.
As Theodore Roosevelt said, “Knowing what’s right doesn’t mean much unless you do what’s right.”
Christine Bau is founder and principal of HR consulting firm People Focused.
I wonder if the point is being missed. The Code of Ethics will be a subject for study but, more importantly, it will be monitored and enforced. The draft code is being consulted upon by FASEA now and submissions need to be made. It contains some unusual principles that should concern readers.
https://www.fasea.gov.au/consultations/code-of-ethics/
How about FASEA concentrate on working out qualifications are ok or not before coming up with a made up ethical course. At least there won’t be too many people hanging around the industry to take it so the marking time should be short.
You can’t study ethics and morals. It is too easy to pass, too simple to guess the right answer. You are either ethical or you are not.
This ridiculous education and study course this industry and its leaders keep throwing up and suggesting is the problem. YOU CANT STUDY OUT THE BAD APPLES. The crooks in this industry are just like Sam Henderson and all the other past slick advisers. They are smart already, can pass any test and will smooch their way to peoples wallets. There is one thing they can’t pass and that is ethics and morals, they will pass the written exam on it and get great course results but just like Sam Henderson showed, it is just a matter of time before greed takes over and they are not happy to earn a living they need that next sale, that next high five moment.
What this industry needs is supervision and or checking of advice given on a full on regular basis. NOT EDUCATION AND COURSES! What is it that you fools don’t get about this? What a joke. Even in a crisis the governing bodies are still pointing to education. What a joke this pathetic slimy industry has become. Absolute embarrassment to be called a financial planner today. Pathetic.
More importantly than ethics qualifications are the intangibles: unselfishness, honesty and trust. If we grow up from childhood devoid of these virtues, then a qualification in ethics will have no foundation.
The CFP Course includes a very comprehensive ethics module. But seemingly FASEA’s prejudice against the CFP Course also extends to forcing graduates of that course to do an additional FASEA ethics module as well.
But hang on a minute. Doesn’t one of the FASEA board members work for an organisation that provides ethics training? Isn’t this yet another appalling conflict of interest from the FASEA board?
I reckon FASEA will consider CFP/FchFP as soon as you dont need to be a paying member to have it… Until then, no dice. Take that up with the associations.
How does the quality of the education change depending on whether or not the course graduate is a paying member of an association? FASEA is supposed to be about education standards. Not association politics. Not the commercial advantage of board members’ employers.
This is more about Private versus public sector education systems. It has nothing to do about what’s in the interest of planners or the public. There are no representatives of the private education system on FASEA. The public education system is broke and been losing fee paying students to the private system for years. Now it’s pay back time. Just think Union’s and banks, Liberal and Labor…does that make it easier? Labor comes along and it’s compulsory Union membership, Liberal come along and we have a RC into Unions. FASEA is public sector and CFP’s are trying to get a private sector course recognized. That’s just hilarious. 😀
You’re clutching at straws pal. Nobody seems to get past their own conflicts before pointing the finger elsewhere and saying “But what about them….” It’s like dealing with 8 year olds.
Just suck it up and deal with it. Everyone in the industry will be doing the ethics module, no matter what their pre-existing qualifications & experience. If you think that financial planning needs a broom thru it after the disclosures at the RC then you’ll get behind the FASEA changes. If u dont well, you and anybody else that thinks that way are yesterday’s man…
And guess what, it doesnt matter what anybody INSIDE the industry thinks, because everybody OUTSIDE the industry thinks we’re corrupt money hungry arseholes. Just wait until those f%#wits from Labor get into power again. We will be regulated up the wazoo, and the changes with FOFA will look like a walk in the park compared to what those idiots will dream up.
FASEA is top heavy with Uni Academics and let’s face it, the CFP course is a privately run course with revenue going to the FPA. I spoke to a group academics from 3 different Uni’s recently about FASEA & FASEA not recognizing the CFP course and the value of privately run education and….they laughed at me…then after they picked themselves off the floor they said… you get what you pay for.
My thoughts are, you better start writing to your MP and the Minister if you want change with FASEA cause FASEA head is an academic, the FPA have their own agenda and given their bed fellows are AMP Financial Planning, FASEA now has the ammunition it needs and a real reason following the Royal Commission to disregard any FPA or AFA requests. Getting a submission from the FPA following the RC is like asking Chopper Reid for advice on morals.
Much of the CFP Course is outsourced to Deakin. Revenue must therefore flow back out to Deakin.
but it’s still not a University course is it. It’s a privately run course. The FPA made 1/3 of it’s revenue from the CFP course. So Not much revenue is flowing back to Deakin in this case.
It also includes a university lecturer and they are, quelle surprise, recommending university eduction.