The AFA is looking for “a practical approach to the issue that addresses the deep complexity and extended timeframe” AFA CEO Brad Fox said in a statement, adding that industry had time to get it right.
Aside from expected code of conduct behavioural requirements, the new code also needed to be seen to obviate opt-in requirements as specified in Future of Financial Advice (FOFA) requirements. This meant the code was morphing into something else, with significant implications, he said.
“Designing a code to circumvent elements of the law is at odds with the intended purpose of professional codes – which are typically about how to apply the law to give the right client outcomes,” Fox said.
Despite the high standards outlined under FOFA, compliance with the law remains the minimum standard, he added.
The AFA discussed the issue with Australian Securities and Investments Commission (ASIC) commissioner Peter Kell and licensees at last month’s AFA Licensee Leadership Forum and is “carefully considering the views of advisers and licensees” in deciding whether to implement a single code or have a second separate and more stringent component for those wishing to work around opt-in requirement.
“This appears to be a practical way of helping our members choose a code that suits their preferred business model and which is also compliant,” Mr Fox said, “However the option of a two part code will be subject to further discussions with, and consideration by, ASIC. It’s an alternative worthy of consideration by advisers, licensees, and the regulator.”
