In releasing its approach to ensure adviser compliance with the code, ASIC said it expects licensees to take reasonable steps to ensure that their advisers comply with the code and include the following systems and processes:
- 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.
ASIC said it will take into account the context in which licensees operate, including the regulatory environment, the timing of guidance provided by FASEA about the meaning of the code, and the evolving industry understanding about the meaning and implications of the code.
Licensees will still be required to take reasonable steps to ensure that their financial advisers comply with the code from 1 January 2020, and advisers will still be obliged to comply with the code from that date onwards.
However, while ASIC said it may take enforcement action where it receives breach reports, it added that it will not be monitoring or enforcing individual advisers’ compliance with the FASEA code.
“Under the Corporations Act 2001, ASIC does not have a role as a code monitoring body and is specifically prevented from exercising its power to ban an adviser for breaches of the code,” the regulator said.
if the CoE is to be read as a whole and there are conflicts between them (#3 says no conflicted $ yet Std 7 says its OK if allowed by Corps Act) and we are not to treat Guidance as real (as it is not law, so is it rubbish?) so how on earth do we mere mortals interpret this in our practices? I find it hard enough to deal with all of the other compliance crap that adds NO VALUE to my clients let alone get my non-legal head around a convoluted mess that is coming into force in a few weeks. The Government should state that this whole FASEA process is on hold until clarity is found… that means the exams, education standards as it pertains to RPL, and the CoE. Then we can relax and get our hearts out of our mouths. ASIC are indeed, handballing to AFSL’s and will mop up via litigation in a few years…. and we will have paid them for the privilege
Interesting, raise issues with Fasea, ASIC, MP’s (shout out for nothing to Ross Vasta), Adele Ferguson (journalists), and nothing. Yet Izzy’s tweets, get more news.
Everyone- close up shop and go home. The Advice industry/profession (called it what you want) is officially DEAD. This is what happens when dumb politicians, bureaucrats and stupid lawyers get involved. All totally conflicted.
Welcome to the mad-hatter party. ASIC about to get flooded with code breaches. Especially with old files being re-run with the COE.
At what point do the powers that be call all this for what it was and scrap it and start again. Oh wait that won’t happen as ego’s and egg on face will stop all that. That’s the saddest part, people have left, lost their life, and potentially many many bankrupted all because ego will stop what needs to be done.
financial planning is finished.
So in a nutshell, FASEA is out of control, The new code is unworkable and ASIC are stepping away saying its the AFSL holders responsibility to enforce it unless an adviser is reported for breaches.
Perhaps when 90% of the advisers who are left are reported for taking some form of commission ASIC can just step in and close up Financial Advice for all, for good?
as clear as a beer bottle at the bottom of a creek… a field day for the lawyers… licking their lips at the legal fees that will be generating.. I can just see them touting for business now… no win no fee bonanza!!
…and they’ll charge by the hour, which ASIC and FASEA tell us removes all conflicts of interest!
[quote=Anonymous]Asic the concern of all competent advisers is that fasea, opt in, ethics training etc are all complete waste of time and resources. Please investigate.[/quote][quote=Anonymous]
you are not wrong. the biggest proof in all of this is the accounting bodies united voice on the topic. even they think this is a big mess.
as most of you would know, the accounting bodies (IPA,CPA, CA ANZ) are usually too late, and late to the party most often (in fairness they are financial historians). they are only just realizing the ramifications of the accountants exemption ending – year, i know it happened like in 2016.
if you are super conscious trying to do the right thing – you are thinking more about being compliant and not breaching any aspect of the law – than you are thinking about the advice to the client.
what a total utter mess, totally unworkable. i am not giving any advice to anyone without some certainty first. no thanks.
anyone who says otherwise; is either not an adviser, has not given any advice or simply does not understand the enormity of their obligations.
This should be a full day ethics course signed off by Solicitors stating that we are competent under fasea COE – That it – NOE EXAMS or our industry is gone – 3500 advisers gone is six months !
Malcolm Turncoat did this!
[quote=Endangered IFA]We need to look through all the spin on this. The Code specifically bans life insurance commissions and asset-based fees. It is there in black and white in FG002, bottom of page 17. ASIC have said in their press release they will tolerate inadvertent breaches. But they are still demanding licensees take reasonable steps to ensure advisers adhere to the code. So what does that mean for a licensee, who collects and distributes revenue to self-employed advisers? It means they will be forced to switch off all of this revenue on 1 January, or risk a systemic breach and action from ASIC. This is going to be hugely damaging to self-employed advisers and it has the potential to cause widespread bankruptcies and job losses. The minister needs to intervene immediately SOS[/quote][quote=Endangered IFA]We need to look through all the spin on this. The Code specifically bans life insurance commissions and asset-based fees. It is there in black and white in FG002, bottom of page 17. ASIC have said in their press release they will tolerate inadvertent breaches. But they are still demanding licensees take reasonable steps to ensure advisers adhere to the code. So what does that mean for a licensee, who collects and distributes revenue to self-employed advisers? It means they will be forced to switch off all of this revenue on 1 January, or risk a systemic breach and action from ASIC. This is going to be hugely damaging to self-employed advisers and it has the potential to cause widespread bankruptcies and job losses. The minister needs to intervene immediately SOS[/quote]
No, the Code does not specifically ban life comms or asset based fees. FG002 is not the FASEA code. Don’t conflate the two.
it actually does for an individual adviser or CAR… The only one who can receive it is the licensee as it pertains to paying a wage…
Ok, then…the code bans them & the FASEA Guidance (FG002, p17) removes any doubt. It’s the same thing. Stop trying to muddy the waters. Self-employed financial planners are about to have their businesses destroyed. This is serious stuff. ASIC has clearly stated they expect AFLS’s to take reasonable steps to ensure advisers adhere to the code. So they must terminate all asset-based fees and life insurance commissions in 34 days. If they don’t, ASIC can prosecute them. There is no way they can knowingly pass through banned remuneration. To do so would not be an ‘inadvertent’ breach, it would be systemic. The only way to avoid the widespread collapse of the majority of small advice practices, is for the minister to intervene. FASEA have failed to properly consult with practicing financial planners or do any serious investigation into the impact of their unprecedented, draconian measures. They are derelict in their duty and they need to stand down. Catherine Walters and Stephen Glenfield should be the first to go.
Stop panicking. The Guidance is just that and is not the law. It’s not the same thing – clearly. It’s open to interpretation. What is a “disinterested person” ? It couldn’t be the client as they sought advice. “What is reasonable expectation” ? If you can point to a direct prohibition all well and good – but you can’t.
Lol what?? The guidance isn’t law but the code is?… And the guidance is exactly that guidance on the code which is law..
Do you know what you’re talking about when you make a blatantly wrong statement like that?
Don’t panic? ASIC just failed 80% of FDS’s based mostly on minor technicalities and extreme legalistic interpretations of the law. Do you think they will let it slide when dealer groups pass though asset based fees and commissions that FASEA clearly say are banned in their guidance document? Nope, systemic breach, ‘why not litigate’, game over…
Standard 3 says all conflicts should be avoided. Given that ALL remuneration is actually conflicted, including fee for service, the literal interpretation of Standard 3 is that the only allowable financial advice is that done for free.
Fasea Code Std 3 should be read in totality, along with Fasea Std 7, which permits commissions provided they are permitted under the Corporations Act (this includes insurance commissions).
Gee so sorry…the code bans asset-based fees and life insurance commissions, FG002 removes any doubt. There you go. Oh, if you are still deluded by Glenfield’s disgraceful attempt to fool us into thinking this revenue can continue post 1 Jan, read the article in the AFR today. Licensees are getting ready to report beaches on mass, as they will be facilitating breaches of the code when they pass on this revenue to self-employed advisers. ASIC will then be one step away from bankrupting the majority of self-employed advisers and their licensees. I wonder what they will choose to do? Hmm
The problem in a nutshell is that nobody, and I do mean NOBODY understands the Code or how it is to be applied.. Standards 3 and 5 come to mind. Seriously, whats not to get ? Why is it so hard for someone, anyone to say, for example, asset based fees are ok or risk comms are ok ? Utterly ridiculous !!!!!!!
Asic the concern of all competent advisers is that fasea, opt in, ethics training etc are all complete waste of time and resources. Please investigate.
So even ASIC are saying the COE’s are stupid? lol…
Hey ASIC and FARSEA, does anyone actually know how to comply with this code that is a Law unto it self ??????
We need to look through all the spin on this. The Code specifically bans life insurance commissions and asset-based fees. It is there in black and white in FG002, bottom of page 17. ASIC have said in their press release they will tolerate inadvertent breaches. But they are still demanding licensees take reasonable steps to ensure advisers adhere to the code. So what does that mean for a licensee, who collects and distributes revenue to self-employed advisers? It means they will be forced to switch off all of this revenue on 1 January, or risk a systemic breach and action from ASIC. This is going to be hugely damaging to self-employed advisers and it has the potential to cause widespread bankruptcies and job losses. The minister needs to intervene immediately SOS
This has to be one of the biggest “handballs” of all time by ASIC. All care no responsibility. We (ASIC) have no mandate or legal recourse to enforce a code of ethics devised by a bunch of academic boffins, some of whom are conflicted in receiving remuneration from Education bodies as a result of introducing the standards in the code. Well played everyone