Code Committee sackings unwarranted

With all the controversy of the advisory industry I thought it would be worth recording some thoughts on what is going on at the moment. There is a feeling that any control or input advisers had over their coming regulation has totally disappeared. Last week’s sacking of two advisers from the Code Committee affirms this notion strongly for me. Especially as there are no plans to replace them on the committee. Also former AIA New Zealand boss David Whyte made a lengthy comment on the article last week which had some salient points. One he made was any thoughts of co-regulation of the advisory industry are long gone. He also made some very interesting points about the Consumer survey of advisers and why it was flawed. There is a feeling the survey had a pre-determined outcome; if so it achieved them. IFA president Lyn McMorran said in an email to members yesterday it used “sensationalist” – that no one would really argue with. However I have also heard the language in the draft sent out for review and the final published work was vastly different. With regards to the sacking of Patrick Middleton and Liz Koh, I’d have to say that the Commissioner of Financial Advisers, Annabel Cotton, has over-reacted. One argument put to me is that if these two were forced to fall on their swords, then anyone associated with any of the firms which “failed” the Consumer survey should not hold high office. This argument would capture people like McMorran. Clearly that doesn’t make sense; just like the Code Committee sackings make little sense. I doubt many people had linked the Code Committee members with the survey and surely it would have been possible to defend them if the situation ever developed that far? Both are well-regarded members of the advisory community and no doubt provided valuable input into drafting the regulations.