The chief executive of Kaplan has revealed that the education provider has no interest in applying to ASIC to be an ethics code monitoring body, and is content to let the industry’s professional associations duel with commercial enterprises for the role.

“We mulled it over ourselves and decided that we don’t want to be a code monitoring body,” Brian Knight says. We thought about it, but we’re an educator, and that’s what we do.”

He says that even the associations themselves were curious whether Kaplan was applying for the role.

“We’ve had discussions with the associations about how we can support them and initially they asked us if we were going to try to be a code monitoring body,” he reveals. “We’ve been upfront and said no.”

The revelation comes as the window for bodies to apply to ASIC to be a code monitor is closing. ASIC announced guidelines for entities to submit compliance schemes alongside a code of ethics in an amendment to the Corporations Act (2017). The regulator then advised in its May consultation paper that the first stage of the three-stage application process, called an “expression of interest in seeking approval of a compliance scheme”, should be submitted by the end of September.

Draft applications for compliance schemes must then be submitted between November 1 and December 31, 2018. Feedback will be given to applicants by March 31, 2019, and final applications will need to be submitted in June.

‘Tension’ between functions for associations

During the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the ability of associations to both represent and discipline advisers was questioned, culminating in the frank admission by Phil Kewin, chief executive of the Association of Financial Advisers, that there was “tension” between the two functions.

His counterpart at the Financial Planning Association, Dante De Gori, also acknowledged that practising the twin roles was “a challenge”.

This level of doubt contributed to education providers such as Kaplan, and commercial providers such as KPMG and Deloitte, being considered options for the monitoring function within industry circles.

Kaplan, which reported a US$1.5 billion global revenue figure in 2017, would be considered the domestic education provider most likely to apply for the role, given its firm connection to the advice industry.

Knight affirms, however, that Kaplan will remain focused on education provision, and look forward to supporting whichever entity, or entities, accept the role of ethics code monitor.

“We see our role as assisting, whether it’s a multitude of associations or a combination or there are different ones,” Knight explains.

He says the commercial side of monitoring advisers will be difficult to navigate and will require the kind of resources Kaplan isn’t willing to commit.