Dealer groups are divided on whether to accept payments from product providers to present at adviser events, but most believe that any conflicts inherent can be managed and licensees should have the right to decide.

Sponsorship arrangements between product providers and licensees at adviser events like personal development and workshop days are common, and for larger licensees can mean six-figure payments.

A growing section of the licensing community, however, is preferring to run their PD days free of sponsorship.

Jonathan Christie, general manager at Melbourne-based licensee Oreana, says they decided not to accept sponsorship of adviser events or product rebates “from day one”.

Last week Christie hosted a PD event for around 50 advisers in Sydney. “For one of our newer practices it was the first time he’s come to something like that without product representation,” he says.

Nathan Jacobsen, who runs Sydney-based licensee Paragem, shares Christie’s view.

“We don’t accept sponsorship and haven’t taken any payments from fund managers as far as I’m aware of,” he says. “That’s not going to change.”

Despite their shared conviction in running educational events free of conflicted payments, neither Jacobsen or Christie are looking to pass judgement on licensees that do so.

“I’ve got no issues with someone taking sponsorship,” Christie says. “I’m not taking an ethical stance here, it’s just not our approach.”

Jacobsen says he’s not looking to cast aspersions on anyone’s model, and “shares some sympathy” with licensees that accept sponsor payments. He acknowledges the commercial advantages of bringing sponsors in to present educational material while also promoting their products and services. It can work, he reckons, but it’s a “tricky line to walk”.

Conflicts in the advice ecosystem have never been more under scrutiny and their future never more uncertain. As The Fold Legal’s Simon Carrodus told Professional Planner in February, ASIC’s RG 246 provides an ‘open exemption’ that allows the licensee to decide if a benefit is affecting advice. Yet while ASIC (and the Corporations Act 2001) point towards discretion when it comes to conflicts, FASEA’s Code of Ethics (Standard 3) puts forward that advisers should not “advise, act or refer” if a conflict exists.

FASEA’s Code of Ethics however, relates to advisers and not licensees. From a regulatory standpoint, there is nothing concrete to stop licensees from continuing to accept sponsorship from providers when their advisers go to school.

No product flogging

According to Eugene Ardino, the chief executive of licensee Lifespan Financial Planning, PD event sponsorship can be beneficial if it’s handled correctly.