Independent and non-aligned advisers have questioned whether the government’s Financial Adviser Standards and Ethics Authority can truly represent their interests given its board membership.
In April, the federal government formally established FASEA to oversee the professional conduct of the financial advice sector.
Among a line-up of academics and executives, two former practising advisers were appointed to the body’s board: Matthew Rowe, chief executive of CBA-linked Countplus and former FPA chair, and Deborah Kent, principal of NAB-aligned Integra Financial Services and a former president of the AFA.
Since the announcement, members of the non-institutional advice community have voiced concerns to ifa that the board will not truly represent the various industry factions and sub-cultures.
Fergus Hardingham, principal of FM Financial Solutions and an IFAAA member, told ifa he was concerned that the interests of independent advisers will not be heard within FASEA meetings, given the institutional alignment of the two industry representatives.
“The IFAAA represents from my perspective advisers who strive to provide a higher standard of advice without conflicts of interest,” Mr Hardingham said.
“Surely the IFAAA should therefore have a seat at the table to help set the agenda from the advice provider perspective.”
A former principal of an Adelaide-based boutique firm, speaking to ifa on condition of anonymity, also voiced concerns about the ability of the two industry representatives to reflect the views of the IFA sector.
“The entire independent advice community is very disappointed and confused over how the government-appointed FASEA board does not have any representation from our sector,” the former principal said.
“The two appointed FASEA advice directors are sourced from the seriously conflicted vertically integrated advice businesses of two major institutions, and one of these institutions has the most unenviable track record with ASIC investigations in recent times.”
Another non-aligned adviser, speaking to ifa on the same condition, said it was another example of the “ongoing industry manipulation by the big associations and big dealer groups”.
However, fellow member of the non-aligned community, Chris Morcom of Hewison Private Wealth, dismissed the concerns of his peers as unfounded.
“I think it’s an independent, secondary body with a clearly set agenda – to raise minimum standards – and if people don’t like it then bad luck,” he said.
“Any concerns around the board having big-end-of-town bias or something, don't have any foundation.”
Mr Rowe and Ms Kent both declined to comment for this article, but said they are looking forward to providing updates on FASEA’s work at a later stage.
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