Of all the revelations that have been uncovered in investigations by the ABC and Fairfax Media into Commonwealth Financial Planning (CFPL), the one that stood out was the former CFPL financial planner Don Nguyen’s claim that “he did not know” that what he was doing was wrong.
We’re not privy to exactly what Nguyen means by “wrong”. Perhaps he means that since what he was doing was tacitly endorsed and encouraged by his employer, that he didn’t know it was wrong.
Perhaps his training was so perfunctory, and so devoid of any reference to personal responsibility or ethics, that he didn’t know it was wrong.
Or perhaps he means that because everyone else was doing it, it was OK – he didn’t know it was wrong.
Whatever he means, and however it was allowed to occur, what took place at CFPL – and I sincerely doubt that it’s on its own in this regard – is
a clear warning about what happens when a large financial institution is allowed to put its own interests ahead of its clients’, and when it is allowed to reward its salespeople for activities that compromise clients’ best interests.
Don’t forget, if you call yourself a financial planner then in the general public’s eyes you are largely indistinguishable from Nguyen, and Ricky Gillespie and Joe Chan and Simon Langton and Christopher Baker and Anthony Akwar and Jane Duncan and Jade Zaicew and every other financial planner who has been banned or otherwise sanctioned, not only in action against CFPL but in any action against any financial planning business.
That is something you should be losing sleep over. It’s not someone else’s problem – it’s your problem, because according to consumer research released in May, eight out of every 10 people think that reducing regulation of financial planners is not a good idea. That’s a big proportion of the population whose starting assumption is that they need to be protected from you.
This is exactly why regulation of financial planning had to change, and why it has to be made more difficult to become a financial planner, and to stay one. It’s why changes that would reduce the effectiveness of the Future of Financial Advice (FoFA) regime have to be rejected – particularly if they are masquerading as a reduction in red tape.
Frankly, if increased regulation and a brake on the CPFLs of the world makes it a bit more expensive for banks and other institutions to comply, and costs a few bucks in profit, that’s just the price of buying a ticket on the superannuation gravy train.
