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With recent debate raging on theadviser.com.au over the educational standards of brokers, one broker has weighed in calling for ethics classes to be made compulsory for everybody in the industry.
Owner/director of Select My Finance, Brett Day, has followed on from last week’s “Should brokers have a degree” debate suggesting that all brokers should undergo some form of ethics training.
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Mr Day, who holds a degree and was formerly employed with a large bank, said the recent scandal surrounding the Commonwealth Bank and unscrupulous acts by some of its financial planners was evidence that people needed to be reminded of their responsibilities.
“I think if people were taught the ramifications of behaving ethically, they would know the rules, and there’s no hiding from the rules,” he said. “They know the rules and they know the consequences.”
However, Mr Day was less sure how an education program could be implemented.
“Intuitively people do know right from wrong, but how you address that in a classroom? I don’t know. I think new entrants into the industry would certainly benefit from this and that would set a better industry standard,” he said, before adding that the FBAA or the MFAA was the best place to start. “I think it’s their job to deliver that message.”
“I think in any industry you see people behave unethically. I still think this industry has an issue with people falsifying documents and so unethical behaviour is happening, but I don’t think it’s any more than in any other industry or amongst the general population. But let’s put a light on it; let’s know what’s right, what’s wrong, what’s acceptable and what’s not,” he said.
However, FBAA CEO Peter White didn’t feel any pressing urge to get behind ethics classes.
“Ethics for doing what?” Mr White queried. “I would say the vast majority of people are morally and ethically sound. Are we merely trying to cater for the vast minority by doing this?
“How many brokers get charged by ASIC each year? And let’s say that’s a litmus test for ethical behaviour. How many does ASIC charge a year? It would be less than 40. There are roughly 36,000 ACLs and ACRs in this country and let’s say 36 of them are acting unethically – that’s a pretty small percentage. Why would you want to target that when the absolute vast majority are on the money?
“I know not everybody acts above board – life’s not that clean cut – but if we’re trying to make ethics classes mandatory, I think we’re looking at the wrong thing; there’s more important industry issues than that,” he said.
Mr White believed brokers were already well aware of their ethical responsibilities via things such as NCCP, licensing obligations, responsible lending conduct and Privacy Act legislation and urged brokers to do “refresher courses that would remind brokers what their obligations were and to keep current with any potential changes in those areas”.
“Doing updates and refresher courses on those sorts of things are without issue and should be mandatory,” Mr White added. “And if you do own a business you should be mandatorily sending staff on these courses. It’s just becoming so difficult these days to keep on top of things a broker has to legally comply to.”
[Related: Brokers defended at parliamentary inquiry]
