Posts tagged Culture
And another thing, I've been wondering, lately

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has identified so many cultural, ethical and management failures that vertical dis-integration, Product Intervention Powers, BEAR and the imposition of Principal Integrity Officers are needed to restore trust. Ignoring current and proposed "regulatory catalysts", I'd suggest that re-defining 'Compliance' is a critical step to restoring trust and creating transparency and accountability.

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Building in 'best interests' and better supervision

Since 2012, the Industry struggled first to understand, and then to operationalise, the 'best interest' duty. While the majority of Licensees eventually embraced this fundamental new duty, some participants failed spectacularly. In a previous article we suggested that competent AFSL should review their compliance arrangements in the wake of ASIC v NSG and ASIC v WRM. This article addresses where to start.

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Trust, Culture and Enforcement

On 12 September 2017, ASIC Chairman Greg Medcraft presented at the Thomson Reuters Newsmaker event and articulated his view that ASIC is primarily an enforcement body responsible for promoting investor trust and confidence in financial services. With reference to the ongoing actions involving Commonwealth Bank, NAB and a range of smaller licensees, the Chairman discussed ASIC's priorities and addressed a variety of topics including trust, reputation and culture. This article explores the reasons, consequences and implications of those views. 

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Complexity, clarity and 'best interests'.

The financial services industry has much to recommend it; it’s complex, uncertain, frequently changing, over-regulated and highly scrutinised. These elements make it a challenging and dynamic industry, but it’s precisely these conditions that make the emergence of an advice profession both necessary and inevitable. We're mired in complexity, but perhaps by prioritising outcomes over processes we'll achieve both improved clarity and better consumer outcomes. 

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Who watches the watchers?

ASIC Report 515 "Financial advice: Review of how large institutions oversee their advisers" reported on ASIC's review of 160 client files that had previously been reviewed by the Licensees themselves and identified the discrepancies. Conflicts, capability and culture are the main problems but systems, processes and purposes also have significant impact. (Our companion post addresses systems, processes and purposes in more detail)

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What Wells Fargo taught us about culture and compliance

Culture. Compliance. Misconduct. In a year of scandals, regulatory action and relentless media scrutiny, the failure of licensees – or their highly paid and well-promoted management teams – to honestly assess and check their own conduct is both incredible and disheartening, but it's not just an Australian problem. Focusing on the Wells Fargo scandal this post explores how "culture", conflicts and conformity can compromise ethics, vision and values. It also offers ten (10) tips that businesses can follow to avoid similar public scandals. 

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The 2015 Season: Compliance, Culture and Responsibility

The Financial Service Industry's obsession with "compliance" is unhealthy and counterproductive; it creates unrealistic expectations of error-free business, ingrains negativity bias in the corporate DNA and shields management incompetence from proper scrutiny. The solution isn't to abandon regulation but rather to reframe the game around players' responsibilities.

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You’re right, “Compliance” is the problem.

While it may not be immediately obvious, the embrace of “rules-based compliance” and its obsession with meeting (but often failing to meet) the letter of the law, has also shackled an emerging advice profession to incentives, legacies and values that have restricted its maturation. So what is the better alternative for advisers and licensees?

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Selling Compliance: The critical role of Compliance Managers

It's difficult for most people to appreciate the particular and ongoing challenges faced by Compliance Managers in financial services. The role itself, and the contribution it makes to the business by whom they are employed, is often a subject of heated debate. I've been lucky enough to work under leaders whose support and engagement with Compliance was a natural and inevitable outgrowth of their ethical values and deep commitment to the wellbeing of their staff, clients and brand. I've also worked under, and with, a great many people with alternative approaches. This post contextualises the role of the Compliance Managers and outlines some strategies that Compliance Managers can use to help achieve their potential.

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Gliding over all: Beyond Banking Bad

Although it’s difficult to assess its impact on the broader community, there is little doubt that Four Corners’ “expose” of Commonwealth Financial Planning generated contemplation, conversation and consternation in the financial services industry. The recent story “Banking Bad” by Adele Ferguson and Deb Masters focused on the sales-driven culture inside the Commonwealth Bank's financial planning division; but it also raised additional questions about the structure and composition of the broader advice industry.

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Commonwealth Financial Planning v Couper: An Insider’s view

Martin Culleton, a Partner with regional law firm RMB lawyers, was the solicitor for Noel Stevens (and then the estate of Noel Stevens) who took on Commonwealth Financial Planning over inappropriate advice, secured a decision in his client’s favour and successfully defended CFP’s appeal against the initial judgment. In this post Culleton talks about Commonwealth Financial Planning v Couper, compliance, conflict and the specific challenges faced by advisers within vertically integrated businesses.

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The Compliance Audit: Ten "red flags" for Reviewers

Despite the recent coverage, there’s no fraud epidemic in financial services; but it’s inarguable that the increased reporting undermines public confidence in the advice profession. Licensees (and advisers) need to do more to detect, prevent and mitigate adviser fraud. Here are ten "red flags" for which you should look.

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