On Monday 7 June 2021, Justice SC Derrington, President of the Australian Law Reform Commission, and Christopher Ash, Senior Legal Officer, presented the first session of the Conexus Professional Planner Licensee Summit in the Blue Mountains, New South Wales. Nearly sixty licensee heads gathered to discuss the challenges and opportunities reform could bring to the financial advice industry.
Justice Derrington and Chris presented a session entitled “Time to Rethink the Rules”. The presentation detailed the scope and purpose of the ALRC’s current review of the legislative framework for corporations and financial services regulation, as well as some of the ALRC’s preliminary findings about the complexity of the regime. Moderated by Matthew Smith, Director of Retail Content at Conexus Financial, the session included audience participation and questions about the ALRC’s review and industry’s expectations of regulation.
Justice Derrington cautioned that regulating advisors as professionals will attract fiduciary duties, as well as ethical duties akin to those in law and medicine:
I’ve noted from the press that professionalism is something that’s really important to you. …And if that’s the track you want to go down, you’ve got to be careful and think about the unintended consequences of doing that, because you might well find yourself in the same position as the lawyers and the doctors with a new load of fiduciary obligations.
Justice Derrington noted that this could “change radically” the way the advice industry delivers its services:
It’s not just that you must act in the [client’s] best interests, you must act only in their interests, and not in your own interests… So it’s not just that you must manage conflicts and avoid conflicts, you have two primary duties; not put yourself in a position of conflict with your client, and not to profit from that position.
A summary of the session was provided by Tahn Sharpe at Professional Planner – Professionalism: Be careful what you wish for.
The engagement with industry representatives provided valuable insights for the ALRC Inquiry. Likewise, attendees appreciated the benefits of the session. One adviser was quoted as saying the most beneficial aspects of the conference was “hearing and meeting the participants from the ALRC” – a sentiment shared by an executive director at Easton Wealth.
Presentation: View the ALRC presentation slides
Professional Planner Voxpop: Hon Justice SC Derrington