FPA welcomes ASIC guidance on Code

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The Financial Planning Association (FPA) has welcomed the release of ASIC Regulatory Guide on approval of Codes (RG183).

The updates made to the ASIC Regulatory Guide include:

• The accommodation of Codes by professional associations or bodies;
• Single entity or licensee-only Codes will not proceed; and
• Guidance on how Codes can obviate the need for Opt-In.

The FPA has led the path of professional bodies in the development and implementation of a Code of Professional Practice and was responsible for the Opt-In relief through Approved Codes being part of the legislation. The FPA Code of Professional Practice, launched originally in 2009, remains the only full suite of professional regulations, incorporating ethical principles, practice standards and conduct rules for financial planners in Australia.

FPA CEO, Mark Rantall, said:
“Whilst the FPA welcomes ASIC’s update to its Regulatory Guide and the changes its proposal will make to financial planning, the FPA is a strong supporter of the need for a complete Code of Professional Standards rather than just Opt-In only Codes. As the Professional Association for Financial Planners, we will ultimately seek Code approval by ASIC, but understand this course may be too hard for some Industry Associations.”

The Guidance also provides direction on how Codes can obviate the need for Opt-In and is flexible to working with bodies looking to do so. In October last year, the FPA consulted with members, the financial planning community and other stakeholders to ensure the Code is FoFA ready.

Rantall believes the FPA Code solution removes the need for Opt-In for its members.

“It is our view that alternative arrangements to manage Opt-in are best handled within a comprehensive professional code. The FPA Code solution to the Opt-in problem removes the draconian two year termination requirement. Instead, it replaces it with a consideration of the suitability of the ongoing services to the client, judged at the initial engagement and again at a pre-agreed renewal point. Without this, we believe that clients could find themselves without financial support at a time of great need,” concluded Rantall.

The FPA will be considering in full detail the revised ASIC Regulatory Guide before proceeding with the next steps in the Code approval process.