The Financial Planning Association of Australia The Financial Planning Association of Australia

FASEA Code of Ethics – less than 50 business days to go and still no consultation

The Financial Adviser Standards and Ethics Authority (FASEA) has yet to consult with industry, and with less than 50 business days remaining until the Code of Ethics is due to commence FASEA has not consulted with one financial planner[1], according to the Financial Planning Association of Australia (FPA).

The FPA called on FASEA in February 2019 – and repeated this call on numerous occasions – to provide clear guidance that would help financial planners understand and comply with the Code of Ethics. Eight months later, FASEA has delivered a document that raises more questions than it answers.

“With less than 50 business days before the Code is due to come into effect, FASEA has completely failed both in their obligation to consult and to provide clear guidance on how its standards will work in practice,” said FPA CEO Dante De Gori CFP®.

“The process has again been greatly disappointing and completely inadequate, which has produced guidance that is confusing, out of touch and at odds with existing financial planning laws and standards.

“After two and a half years, the FASEA Board of Directors has yet to consult with any financial planning professional bodies or their members and they appear to be more interested in academic theory than making a genuine effort to improve standards in the financial planning profession for the benefit of consumers.”

Among other problems, FASEA’s Code clashes with the Government’s Royal Commission Road Map, released only two months ago, and the grandfathered commissions legislation passed by the Parliament just weeks ago.

“Financial planners and even the public are confused about which standards should be followed – those in the Code of Ethics set by FASEA or those in corporations law set by the Australian Parliament,” added De Gori.

The FPA now urgently calls on the Government to step in, and to recognise that FASEA has again failed to deliver its mandate to consult and deliver, this time with the Code of Ethics and accompanying Guidance.

FASEA’s website still claims that it will release a draft of the guidance document for public consultation before it is finalised, demonstrating the scope of its failure to consult.

[1] Outside the two (of three required) current industry representatives on the FASEA Board