The Financial Planning Association of Australia has called on the government to intervene on the lack of consultation from the Financial Adviser Standards and Ethics Authority, saying it has failed to deliver on its mandate.
With the code of ethics due to commence on 1 January 2020, the advice body claims that FASEA has not spoken to one financial planner throughout the entire consultation process, outside the two current industry representatives on its board.
The FPA said it 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.
Upon release of the code of ethics guidance last week, the FPA said the document released by FASEA raises more questions than it answers.
As a result, the FPA said it 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.
For example, it noted FASEA’s website still claims that it will release a draft of the guidance document for public consultation before it is finalised, which demonstrates the scope of the education body’s failure to consult.
“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 chief executive Dante De Gori.
“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, the FPA said FASEA’s code clashes with the government’s Royal Commission Road Map, released two months ago, and the grandfathered commissions legislation passed by the Parliament earlier this month.
“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,” Mr De Gori said.
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