The show of unity comes as ASIC outlined earlier this week how it would ensure advisers comply with the FASEA code. In particular, the regulator urged advisers to raise concerns with their licensees around how their systems and controls may hinder their ability to comply with the code.
AFA chief executive Philip Kewin said ASIC’s outlined approach puts forward pragmatic guidance that gives licensees and advisers the level of confidence necessary for a 1 January 2020 commencement of the code.
“The AFA, along with a number of other professional associations, has been actively engaging with key stakeholders, including the government and ASIC, on an ongoing basis, and we are pleased to see ASIC announce what we believe is a sensible step towards achieving a workable outcome,” Mr Kewin said.
However, the AFA and FPA noted concerns around the practical workability of standard 3 addressing conflicts of interest and standard 7 regarding benefit payments and fees.
FPA chief executive Dante De Gori noted ASIC’s facilitative compliance in relation to standards 3 and 7, making it clear that the regulator will not act as a code monitoring body by monitoring and enforcing compliance against the code.
“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,” Mr De Gori said.
“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.”
Likewise, Mr Kewin said the AFA will continue to advocate for changes to standard 3 and further guidance across the board, in particular with respect to standard 7 and scaled advice.
“FASEA now has an opportunity to engage in genuine consultation to ensure the code sets the appropriate standards while at the same time being realistic,” Mr Kewin said.
Fools
And
Sociopaths
Exterminating
Advice
Farcical
Associations
Seal
Extinction of
Advisers
Financial
Advice
Services to
End in
Australia
Hilarious! 😀
Who can come up with a good acronym for FASEA?
If the AFA and FPA are relying on the ASIC press release, they are foolish. If a licensee passes through life insurance commissions and asset-based fees to financial planners after 1 Jan, that’s a systemic breach. It is not inadvertent. Unless ASIC proposes a no action policy or a transition period, or FASEA miraculously change the code at the last minute, then self-employed advisers (except for the microcosm of advisers on pure flat fees or hourly rates) are stuffed. Their revenue will be gutted in 4 weeks, and they will be forced to rebuild their businesses with no time for planning or thinking through businesses models. This means one thing – advisers will jack up their fees as high as they can, because they haven’t had time to plan this out. Good luck consumers. Advice is about to get very expensive.
I have a lot of flat fees but how does my licensee know if the fee from a provider is based on a flat fee or a % fee? They simply receive a payment and then forward it on.
I’ve noticed that the matter they’re united on, is slapping themselves on the back and taking the credit for the hard work that many advisers do in directly lobbying politicians when attempting to fix these guys mistakes.
I’m moving to England for 5 years whilst Aussie regulators sort their cr@p out.
Hopefully when I get back there will be a functional personal advice framework.
Enjoy the rain and warm beer
Hahahaha.. Good like with Brexit 🙂
Legally the Code is a minefield for Advisers…Standard 2 for instance regarding casting ones mind to the clients broader situation leaves so much subjectivity to the reality of trying to comply that it would be impossible to defend if challenged – what I think is good detailed notation of a discussion with a client another person out to hang you will say is not…and if the hanging is being done by a regulator guess who wins that argument? How on earth did we end up with a code telling us what THEY think is unethical from an organisation (FASEA) that is currently in breach of it itself??
The FARSEA farce Continues
In a long term client relationship, it’s the equivalent of having someone watch the footage of you driving from one side of the country to the other looking for that split second you took your eyes off the road so they can come in and crush you for it.
No it’s like saying the speed limit is now 50 in urban areas so i’m going to fine you for any time in the past you have ever driven at 60 (the previous speed limit)
Why not wait until the adviser force is trained in ethics, before we apply an ethics code. Why apply a code that is still completely open to interpretation and non enforceable? As an industry we need to get the education piece done and then look at how we control the standards, it may not even be necessary when the adviser force is fully trained and have some knowledge in the ethics space.