Industry leaders took to the stage during the day to cover the big issues impacting investment management today – from ESG to understanding the financial marketplace of the future, identifying and responding to ethical conundrums and improving transparency and communication with investors.

There was widespread acknowledgement from speakers that disclosure and regulation can only go so far to address challenges highlighted by the Hayne Royal Commission, and agreed that culture change is equally important. This thorny question formed the basis of a robust debate entitled “The future of financial services lies in better culture, not regulation.”

Almost 200 delegates responded and the results marginally favoured culture over regulation in a close-fought battle. 48.5% of attendees said culture change was the future, 39.7% argued for regulation and 11.9% were undecided.

Earlier in the day ASIC Chair James Shipton honed in on fairness in investment management, when he said that the only way to increase trust and ensure good investor outcomes is through a mixture of culture change and effective regulation.

“It’s right that the community has high expectations of the financial services industry and regulators – because the system exists to serve people – collectively, but also individually.

“Professionalism is a combination of competence and conscientiousness, and although we have a lot to be proud of in Australia, we can’t rest on our laurels – we must continually strive to improve standards and fairness,” he said.

Sonia Gandhi, CFA, Director of Ethics Education & Professional Standards for the CFA Institute highlighted how easy it is for clear ethical breaches to remain unrecognised – for reasons including situational influence, or the misguided belief that if everyone else is behaving in a certain way it must be ok.

It was Ms. Gandhi’s very strong view that we have enough regulation, and that what is needed is a robust ethical culture and good corporate practice across all levels of management. Although she agreed with Mr Shipton that the concept of fairness must lie at the heart of all decisions.

“In every interaction we need to ask ourselves three questions – ‘is it legal?’, although this is the easy part – we usually know whether something is legal or not. ‘Is it honest’ is the more important question, followed by ‘is it ethical, or how would I feel if I were on the other side of this action, in my client’s shoes. Would I really think what I am doing is fair, if it were being done to me?’”, Ms Gandhi said.

Talking about the conference itself, CEO of CFA Societies Australia, Lisa Carroll, said that an important part of CFA Societies Australia’s role is to promote the highest ethical and professional standards in the investment industry, and that the 2019 Beyond Disruption Conference is part of that commitment, in conjunction with research, industry commentary and professional development.

Ms. Carroll pointed to the results of the 2018 CFA Institute Future of Finance’s global survey on the state of investors trust. Entitled “The Next Generation of Trust”, she said the report shows the importance of talking about and improving trust, ethics and professionalism in Australia now.

“Trust in the financial services industry in Australia is among the lowest in the world – only 31% of those surveyed trust the industry, and worldwide, only German investors have less trust (24%) in the financial services industry than we do.

“This may not be particularly surprising, given the Hayne Royal Commission findings, but as an industry we must work together to address it, so I am pleased that so many of the delegates said how engaging and thought-provoking they found the speakers’ presentations.

“The CFA Societies Australia conference offers a forum for industry luminaries and experts to openly and honestly discuss the major issues we face as an industry – and more importantly, to come together to identify potential solutions,” she said.

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