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  • Writer's pictureOakmont Financial Group

Bringing Ethics to the Forefront of Wealth Management

The most fundamental requirement from our wealth advisers is that they be fair and ethical. And that they be accountable and responsible in their behaviour. They are, after all, dealing with our hard-earned money. Yet, despite the best efforts by all involved, instances of ethical lapses and moral wrongdoings continue coming to light.

From mis-selling and misrepresentation of financial assets to bankers taking away unjustifiably large bonuses – there are a number of issues to be discussed openly and transparently. We expect government regulation to ensure this.

To this end, the government has implemented the Future of Financial Advice (FoFA) reforms. This bill introduced new regulations, most notably, a statutory fiduciary duty on financial advisers to act in the best interest of their clients; a “best interest duty”.

We do agree that a significant level of industry, firm and practitioner-level self-regulation is also essential. People would expect that financial advisers, just like doctors, to treat the “best interest duty” as a kind of a Hippocratic Oath.

The findings from the Banking Royal Commission that was set up to investigate misconduct in the banking, superannuation and financial services industry were in line with this view. Honourable Commissioner Kenneth Hayne’s final report, released on the 4th of Feb 2019, made some robust and forthright recommendations.

In this climate, bringing ethics to the forefront is indeed a big priority. It is, however, just as crucial to remember that there are still plenty of advisers who do, in fact, and always have, put their clients needs first.

Here in this blog post, we discuss things from our own experience, as wealth managers and advisers of repute. We shed light on some of the processes we have developed in order to safeguard your wealth and assure you of our ethical behaviour.

1. Implementing Transparency

Transparency is perhaps the cornerstone of our practice. When we talk to you about your money, we hear you. We take note of your hopes and aspirations. And we give you sound advice that ensures your success.

We are upfront about our fees and charges, terms and conditions, and results and expectations.

We dispel misinformation every step of the way. Having an open conversation with you ensures that we are able to take everything into account and make relevant recommendations.

Keep this in mind while talking to your financial advisers. Keep your eyes open. Look at the fine print. Ask questions and get your doubts clarified.

2. Ethical Mentorship for advisers

It is an accepted practice for apprentices to join the ranks without thorough orientation. Training and education are available from schools and universities as well as on-the-job. But there is a gap. What ensures that advisers are acting ethically with your money?

The Financial Adviser Standards and Ethics Authority (FASEA) established in 2017 is now a standards body responsible for setting the education, training and ethical standards of financial advisers, licensed under Australian law. It has introduced a ‘Professional Year’ for all new entrants to inculcate professionalism and ethics in their roles. Additionally, all existing advisers will need to complete a course in ethics.

Added to this mentorship from within the firm that can become invaluable in generating greater accountability and ethical attentiveness. This is perhaps a good area to have a brief discussion about while scanning over your adviser’s credentials and accreditation details.

3. Learning about money

And finally, making ethics a core value that is central to all financial decisions is also about taking responsibility and learning about money yourself. We all know what is morally right. For instance, we know avoiding taxes is not an option. We also know that there is no such thing as a low-risk, high-return investment. Heed these red flags in conversations and keep a lookout for warning signs.

Make it clear that you abide by ethical standards and that you will not stand for anything less from your advisers.

With a broad experience of over 60 years of consulting, we are committed to our clients’ welfare and to the public interest. We are doing our bit in bringing ethics to the forefront in our practice and in all of our relationships.

If you are looking for sound financial advice that is rooted in ethics and integrity, we are your advisers of choice. Come talk to us today.


General Advice Disclaimer

The information contained on this website and in this blog-post is general in nature and does not take into account your personal situation or circumstance. It is recommended that you consider and use the information provided responsibly, and where appropriate, seek professional advice from a financial adviser.

Although, every effort has been made to verify the accuracy and correctness of information, Oakmont Financial Group, together with our consultants, officers, agents, and employees, disclaim all liability for any loss or damage suffered by any persons directly or indirectly relying on this information.

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