Michael Miller presenting at the Sydney leg of the FAAA roadshow in May.

Embracing Standard 12 of the Code of Ethics and implementing it into our practice starts with recognising that although reporting is one component of accountability, it is not the only part, and there are a range of actions that are available.

In my previous column, I discussed the background on Standard 12 and how of a sample of advisers at the Financial Advice Association Roadshow earlier this year interpret the meaning of the standard.

The range of accountability forums that exist for an adviser who has concerns is outlined below, along with the varied methods and functions that they may employ.

Attendees at the FAAA roadshow were presented with three scenarios that represented potential for poor conduct or advice. These were:

  1. Superannuation advice provided via a cold call marketing agency, to rollover existing funds on the basis of back-tested portfolio outperformance;
  2. Promotion of investment options with misleading portrayal of risks and potential returns; and
  3. Insurance replacement advice that ignored client concerns and contained important errors.

Attendees were surveyed on the options they would consider in each of these scenarios. For the first scenario, attendees were surveyed both at the start of the roadshow, and after being presented with the expanded view of accountability and Standard 12 found in the preceding two articles.

Scenario 1 (start of Roadshow) Scenario 1 (end of Roadshow) Scenario 2 (end of Roadshow) Scenario 3 (end of Roadshow)
Discuss with the client 32% 24% 27% 29%
Discuss with the adviser 10% 21% 26% 25%
Peer discussion 12% 22% 16% 14%
Discuss with / report to AFSL 25% 20% 20% 23%
Report to professional body / ASIC 20% 13% 11% 9%
None of the above 1% 0% 1% 0%


This survey demonstrated that once a wider view of accountability is taken, there was a far greater uptake in the option to discuss a concern with the adviser concerned, or another peer for feedback. It also showed that participants in the session considered that a wide range of options would be suitable, with some variation in responses driven by the facts of the scenario.

In raising concerns with any third party, the concern for the safety of our financial planning system can be paired with an appreciation that we rarely know the full facts of a situation. By understanding that we may know only part of the circumstances, we are able to approach a discussion with a peer with a spirit of curiosity over one of accusation.

This wider concept of accountability is also consistent with the aspect of Standard 12 that was included in the explanatory statement, and has seen less focus: “This Standard deals with relevant providers’ professional relationships with each other, emphasising that they need to be supportive and aligned to the profession as a whole—being, and being seen to be, a profession that acts ethically and professionally.

“One element of this duty affects relevant providers who are acting as supervisors for provisional relevant providers undertaking the professional year (see the Corporations (Provisional Relevant Providers Professional Year Standard) Determination 2018). This Standard requires that you must provide supervision that is in the best interest of the provisional relevant provider, that is, supervision that actively assists him or her in getting the full benefit of the professional year.”

The second paragraph of this explanation highlights the important role that teaching financial planning and ethical principles to new entrants to the profession plays.

Although it may not be immediately obvious, this can be linked to accountability and the prevention of errors in financial planning as discussed in ‘Analysing and Assessing Public Accountability: A Conceptual Framework’:

“Accountability forces administrators to trace connections between past, present and future.