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

FPA welcomes ASIC statement on FASEA Code of Ethics

The Financial Planning Association of Australia (FPA) welcomes today’s statement from the Australian Securities and Investments Commission (ASIC) that outlines its approach to advice licensee obligations for the financial adviser code of ethics.

Following significant advocacy efforts by the FPA and other professional associations to Government, ASIC and FASEA (Financial Adviser Standards and Ethics Authority), ASIC has today provided additional guidance to licensees on their expectations of how licensees must support financial planners’ compliance with the FASEA Code of Ethics.

Importantly this includes facilitative compliance in relation to Standards 3 (conflicts) and 7 (client fee and benefit agreement) of the code, and makes clear that ASIC will not act  as a code monitoring body by monitoring and enforcing compliance against the code.

Dante De Gori CFP® CEO of the FPA, said: “The FPA’s advocacy work has raised concerns in relation Standards 3 and 7 and the short time frames with which to comply. We welcome today’s announcement from ASIC which acknowledges these Standards require significant change, and we support a facilitative compliance approach to this.

“We have expressed our concerns that these two Standards – which relate broadly to conflicts of interest (including fee and business models), remuneration models, referral arrangements, and gaining client consent from existing clients – need more clarification.

“ASIC has reiterated that all financial planners must still comply with the Code of Ethics from 1 January 2020. FPA members will continue to comply, as they have done with the FPA Code of Professional Practice for many years.

“It is important to note that facilitative compliance means ASIC will adopt a measured approach where inadvertent breaches arise or systems changes are underway, provided industry participants are making reasonable efforts to comply,” said Mr De Gori.

ASIC expects licensees to take reasonable steps to ensure their authorised planners comply with the code, including:

  • Making sure that their advisers are aware that they need to comply with the code from 1 January 2020 onwards;
  • Providing training and/or guidance to their advisers on the types of conduct that is consistent/inconsistent with the code;
  • Facilitating individual advisers’ ability to raise concerns with the AFS licensee about how the licensee’s systems and controls may be hindering their ability to comply with the code, and acting on those concerns where appropriate;
  • Considering whether advisers are complying with the code as part of their regular, ongoing monitoring of adviser conduct; and
  • When it is in place, considering the decisions of the new disciplinary body and making any necessary changes to their systems and processes.

The FPA will continue to work with FASEA on amending the Code of Ethics and we will shortly develop further tools and resources to assist members in understanding and building compliance with the FASEA Code of Ethics.