The regulatory requirements imposed on New Zealand Authorised Financial Advisers requires every individual in that category to be wholly, personally, and exclusively responsible for their professional conduct, and to stay on a straight and narrow road in their dealings with the public.
However, such responsibility does not seem to extend to other members of society who carry an even greater responsibility than investment advisers.
The long-awaited introduction of the Financial Advisers Act, and the subsequent development of a Code of Conduct for investment advisers, established a benchmark for members of the public to consider the credentials and bona fides of an adviser when recommending specific financial products. Certain steps must be followed according to the Code when advising clients on investment products, and specific qualifications must be obtained before proffering such services for reward.
While there are still issues with the regulations, the advisory industry has, in the main, buckled down to the task of compliance and accepted their lot. One could argue that a regime which categorises some basic investment contracts as more complex than an insurance product-based share purchase scheme is flawed, but I guess we had to start somewhere.
Perhaps further down the track the comparative consequences of an investor losing $10,000 on a risky investment product - against an adviser stuffing up an intricate commercial financial protection arrangement - will see a penny or two dropping somewhere.
Writing off $10k from a wealthy investment client's portfolio may or may not cause some angst, but getting the details of a share protection scheme even slightly wrong can result in bankruptcy, unemployment, and untold financial stress, misery, and catastrophe.
The measures contained in the legislation and regulations aim to minimise the loss potential of investors by placing increased responsibility and legal liability on advisers operating in this space.
At the same time, the responsibility for transparency, honesty, and consistency seems to be diminishing for our employees in Wellington. By that I refer to our elected representatives who are 100% funded by voters, taxpayers, and consumers.
Since two non-Executive Directors of the Hujlich Kiwisaver scheme declared ignorance of the activities of the CEO of the organisation, the Laird has been truly agog with indifference at the double standards being applied to AFAs and members of the political sector. AFA's are accountable for every word, utterance, and recommendation mentioned to a client; politicians can claim that when discharging their basic duties - such as filling out a Mayoral nomination form - that by not reading the declaration they are absolved of all responsibility.
In the corporate world, ignorance has been deemed to be no excuse in the eyes of the law - as a number of ex-Finance Company directors have discovered at the cost of their liberty.
But in the environment of one law for politicians, and other laws for the rest of us, by refusing to consider officially and legally recorded material, even the Prime Minister is permitted to avoid having to establish the full facts, or is able rely on statements made which are contradicted by evidence.
Here's a question from the Laird for readers to consider - if the MP in question had not been the one vote which sustained the current government in power, would he still retain his post?
Contrast this with the fate of Carey Church and Rod Hartles - two experienced and respected advisers held to account for their actions - compared to the practices of elected officials denying responsibility for their actions.
We are entitled to expect better standards of behaviour from our employees.
Add to this the farce of the Kim Dotcom case in all its glory, and the subsequent shoulder-shrug from our employees in the Beehive, then the application of double standards is as obvious as it is unacceptable.
While the politicians were responsible for introducing legislation to govern financial adviser behaviour, this seems to be a clear case of "Do as I say - not as I do".
The Laird of Albany