The resignation of Deen Sanders from his position as chief executive of the Financial Adviser Standards and Ethics Authority is a disappointment for stakeholders in the advice industry, and leaves many questions unanswered, but a solid foundation has been laid for systematic reform and the authority is in capable hands.
The brevity of Sanders’ tenure is disheartening. FASEA chair Catherine Walter appointed Sanders in August last year; his resignation comes a day shy of concluding an eight-month spell. In a statement from FASEA announcing the move, Walter was circumspect about the reasons behind it.
“Today’s announcement opens the way for Dr Sanders to step down from his current role as CEO to continue his long-standing career in professional standards, and we wish him well,” the release read.
Sanders has made no statement at this point, which will lead to conjecture about whether he walked or was pushed. It was reported in the print edition of the Australian Financial Review this morning that Sanders will join Deloitte as “a conduct partner in its assurance and advisory business”. The quick transfer would suggest that the decision to step down from FASEA was his decision.
Sanders’ conduct as a proponent of professional standards with FASEA, the Financial Planning Association and the Professional Standards Council has shown us that he is a man of good character. My assumption is that he will acknowledge the sudden departure and offer some background when he feels it is appropriate.
One thing we have learnt during his time at FASEA is that Sanders imparts information when he is ready, not before. He won’t be rushed.
Handing over the baton
While early, the timing of Sanders’ departure could be worse and the board should lose only a small measure of momentum. FASEA’s guidelines for reform have been put forward and the consultation process is in place. We are entering what Walter called in the authority’s media release, “the ‘feedback and build’ stage of the work programme”.
The FPA’s 2018 National Roadshow kicks off next week, which should provide the lion’s share of stakeholder feedback. There will also be contributions from individual advisers and from standalone events such as the Self-Managed Superannuation Fund Association’s FASEA Roundtable, also starting next week.
If ever there was a good time to hand the baton over, it is now, as implementation is being sorted. I suspect Sanders, or whoever made the call for him to leave, is aware of this.
There are still many burning questions for the coming consultation debates, chief among them the role of CFP designations in adviser accreditation and who will decide exactly what translates into units in bridging courses.
When I asked Sanders, at the Australian Securities and Investments Commission annual forum in March, whether FASEA would be working with education providers to determine what constitutes recognised prior learning (RPL), he made the point that the Tertiary Education Quality and Standards Agency “has a responsibility here in terms of ensuring that universities and higher education providers are meeting certain requirements”. As for FASEA’s intentions, he was deferential.
“We don’t intend to step into that space immediately, but we are very mindful of the fact that it needs to be considered,” Sanders said.
The RPL issue, including the role of CFP designations, will form a considerable chunk of the work Sanders leaves to his ultimate successor. The question of who will police the ethics standards also looms.
In the interim, chair Walter’s appointment of existing board member Mark Brimble, a professor of finance at Griffith University, to the role of acting managing director, is appropriate. As stated in the media release, Brimble brings “proven leadership capability in higher education and financial services.” He was also, until recently, a member of the Professional Planner advisory board and chair of the Financial Planning Education Council. He knows his stuff.
No small feat
Acknowledgement should be given to what Sanders has achieved. When Minister of Revenue and Financial Services Kelly O’Dwyer announced the reform directive last year, it presented a tricky edict; reshaping the professional lives of 25,000 advisers, no matter how necessary, was always going to put noses out of joint. As I watched Sanders explain FASEA’s position to a room full of agitated stakeholders at the SMSF Association’s National Conference in February, it occurred to me that spearheading the project would take considerable skill and a measure of courage. He has displayed both.
The release of FASEA’s revised education pathways in March, and the attendant proposed guidance, will constitute Sanders’ greatest achievement. This is no small feat. Together, they mark the way forward and without it there would be no effective consultation period.
Yet, the Sanders era will be remembered for its Achilles heel – a lack of communication. When the advice community clamoured for updates, there was no response for extended periods. The adviser feedback period, which ends mid-year, was meant to start “in early 2018” but began only two weeks ago. No real explanation was given for the delay.
In Sanders’ defence, the project would not have benefited from information being handed out in a piecemeal fashion. Decisions needed to be made and conveyed in a considered way and, as mentioned, Sanders was quite comfortable switching his proverbial and literal phone off until he was ready to talk. Radio silence, while often necessary, was not always well-received.
Nevertheless, Sanders did a fine job. Brimble and his successor would do well to continue what he started and take the long view on what constitutes professionalism in the advice industry.
They say that change energises us. It certainly keeps us on our toes.