[Opinion] Serious concerns over Code Working Group behaviour
Advisers should be worried about what is happening with the Code Working Group. It's meant to be consulting with the industry but is trying to gag Good Returns and others.
Monday, March 26th 2018, 1:05PM 
9 Comments
This body has been established to consult with the industry and set the ground rules for how advisers operate in the future.
However, the chairman of the group, Angus Dale-Jones, is trying to gag the media and stifle debate in the industry.
This is totally against the purpose of the CWG, to consult, and shows serious flaws in the composition of the group.
Dale-Jones gagging includes a refusal to respond to any questions from Good Returns. Also Good Returns intends to be at one of the CWG’s roadshow events this week and has been told it will not be able to ask any questions at any of the roadshow.
This is without a doubt a gag on the media and the right to free speech.
It is totally at odds with the group’s mandate to consult with the industry. It is a 100% U-turn on what Dale-Jones told Good Returns when he was a guest on Good Returns TV last year.
But there is more to it than a gag on the media. Dale-Jones says the CWG will not attend an inter-industry association body meeting on April 4 if Murray Weatherston attends.
This is where the problem is.
Dale-Jones has taken offence to a comment made by, and published, on Good Returns.
In the comment adviser Murray Weatherston referred to CWG member, Rebecca McClelland, as "a recent migrant".
He also noted that she was representing AFAs and had worked for the FMA and now KPMG.
Weatherston’s comment was to ask whether she was really representing AFAs.
His comments bring to the surface an issue that has been raised by many advisers; and that is the make up of the CWG, its lack of practicing advisers and its skew to the so-called big-end of town.
Dale-Jones’s attack on Weatherston is puzzling, unless his goal is to try and silence him.
The crazy thing is that Weatherston has been the voice for independent advisers and what he calls the small-end of town. He has willingly contributed hundreds of hours to understanding and critiquing the changes.
And all his comments on Good Returns are made in his own name.
While it is not a point he raised, McClelland is what could well be described as a recent AFA.
Her registration granted in November 2013 and it appears she has little experience at the coal face of giving advice to clients.
This is not a personal comment on her. For the record I have never met her and make no comment on her suitability for the role.
The deeper issue, and the real problem is, the composition of the CWG. There are hundreds of highly experienced advisers in New Zealand but not one of them is on the CWG.
The group is led by a former regulator, who arrived in New Zealand circa 2008, and it has very few practitioner advisers on board.
Good Returns has previously reported that advisers have been uncomfortable with the CWG make up from day one.
This is not a personal criticism of the members of the CWG. It’s an acknowledgement the CWG doesn’t fully represent the advice industry.
The Minister needs to step in on this one. If I was Shane Jones I would be calling for the chairman to resign.
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Instead the best thing to do is to contact the Minister concerned directly and or your local MP and state the background to the proposed Code: Firstly that vertically integrated organisations are a bad deal for mum and dad and secondly, that the current regulatory infrastructure, designed by the previous government i.e. the FMA, MBIE and CWG, have been captured by the big banks and the proof is what they say and do. A good example of the former is that famous comment by the FMA that “doing the right thing depends upon whom you work for”. Don’t forget to mention that the author of the current pro-big end of town legislation now works for a bank and the fact that there is considerable movement of politicians to banks as payback for their efforts.
Agree that the Chairman should go and probably most of the other signatories to the proposed Code favouring vertically integrated organisations.
This refusal to engage with Good Returns, or not attending an industry association meeting is a clear breach of the CWGs Terms of Reference and its own Priciples: Customer Outcome Focus, Transparency, Professionalism, Creativity and Pragmatism.
Thank you to Good Returns for shedding light on this poor behaviour from the CWG.
So why would we bother spending our time preparing a submission if the CWG would have to be ‘brave’ to go against MBIE?
We all know the CWG, FMA and MBIE are captured by this sector of the industry and also has little interest in doing the right thing by investors. Why is there no representation on the CWG from investors?
Why is there no effective representation of expert AFAs? Why are the CWG and MBIE shutting down debate in the 'review'?
It is time for the Government to step in and ensure that this review process provides outcomes that balance the needs of investors with those wishing to maximise profits at their expense.
Personally, I think this review process is a crock for all the reasons set out above and I will not be wasting my time making a submission to a bunch of cronies not really interested in listening.
The CWG always was very high-bred to sell broad participation to industry participants. That it failed is not a debacle was not of the current gov't's making.
An MBIE re-boot of the CWG seems the best chance to have regulation done well.
That or Murray for Minister - the process needs one who cares.
They serve and yield to the interests of the very entities they should be protecting the population from.
I have been silent on this story till now, because I am peripherally involved. But there are very important aspects to this story, so let me try and depersonalise the issue it in order that the underlying issues not be lost.
The key elements of the plot are that there is an industry website including a blog.
The Minister has appointed a Chair to a Committee to advise on a key reform of our industry. The chair is mandated to consult widely.
A comment is published on the blog.
Five days later the Chair takes exception to three words (incidentally not directed at himself) in the comment and issues an ultimatum to the website via its editor that unless the website takes down the comment the Chair finds offensive, the Chair will cease to engage with the website, which is an important part of the information marketplace in the relevant industry.
While the ultimatum is issued privately to the website owner, I have personal knowledge it was made to at least one other person.
The owner of the website has made the issue public via his opinion piece above.
Doesn’t this happening in our small part of the world have implications for the freedom of the press. Or is it OK for public officials who get pissed off with someone to use the authority of their position to punish the transgressor media?
Is anyone else old enough to remember the furore when PM Muldoon banned journalist Tom Scott from his press conferences?
There are several groups I want to take to task for apparent lack of interest. First MBIE and the Minister’s office. My understanding is that no-one from either MBIE or the minister’s office has even contacted the owner of the website to do even a cursory check of the story. I can’t believe that they don’t have an industry scan that hasn’t alerted them to this story. Yet they seem to have done nothing – do they see nothing even possibly wrong here – or is it just BAU?
The second group is the other media. Why haven’t they at least picked up and looked at this story? I have had a discussion with another industry website commentator, and got the distinct impression his stance was “why would I want to give Phil’s story any oxygen”. Jeez, if there is a major building fire, do news sources leave all the play to the first source to get there – I don’t think so. I would have thought the journalists body at least would be interested the threat against Good Returns.
And third I want to call out the would be leading industry associations – the IFA, the PAA and their love-child Financial Advice New Zealand. Why are they not interested in reports that the Chair of the CWG has said he will not talk with a major industry media source –[ I bet Good Returns has more readers than they have members]. Specifically I would ask them to respond as to whether they think it is OK for the Chair to have issued the ultimatum bluntly paraphrased as “take down or I will stop talking to you”. I won’t hold my breath waiting for an answer.
I think that as citizens, we should not stand back silent and watch while bad things happen. Or in 20 years, will we have our own #metoo movement?
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After reading Phil's article, I object to the tone of what I am hearing, and - frankly - would encourage MBIE to consider rebooting the process. All forums must be considered "open" (irrespective of whether the Code Working Group receives unfavorable feedback), and must be accurately reported on to help keep the industry aware of the issues.
From what I've observed from press releases to date, the Code Working Group lacks foresight and has the appearance of over-representing the so-called big end of town. One could easily argue that the Code Working Group has a pre-set agenda.
MBIE must understand that the financial advisory industry is & will remain a 'cottage industry' based on the foundations of relationship & trust. To sideline those who are participate at this level, is missing a crucial element of how the industry functions and gains the confidence of the consumers that it represents. Whilst all aspects of the industry must be catered for, it is important to be mindful of the so-called big end of town who are currently running the ruler over the level of their future participation.