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FASEA, Financial Planning

AFCA cautious on FASEA Code of Ethics

Australian Financial Complaints Authority

AFCA has announced it will take into account ASIC’s facilitated compliance approach to FASEA’s Code of Ethics when applying the new code to adviser conduct from January.

The Australian Financial Complaints Authority (AFCA) has announced its intention to apply the Financial Adviser Standards and Ethics Authority’s (FASEA) Code of Ethics to assess adviser conduct when the code comes into effect in January.

At the Financial Planning Association (FPA) National Congress in Melbourne last week, AFCA deputy chief ombudsman June Smith said: “Until the establishment of the single disciplinary body to monitor and enforce the code, AFCA will take a measured and considered approach to interpreting the code’s provisions.

“AFCA will only assess adviser conduct against the code where a complaint and the conduct has occurred after 1 January 2020.”

The financial dispute resolution body stated it would give the code its “practical meaning” when considering adviser conduct, but would take into account the Australian Securities and Investments Commission’s (ASIC) approach with respect to standards 3 and 7 of the code, as well as FASEA’s guidance on the operation of the code’s values and standards.

The new code, which is due to take effect from 1 January 2020, is expected to be overseen by a single disciplinary body yet to be announced by the federal government.

FPA chief executive Dante De Gori welcomed AFCA’s approach, saying: “Dr Smith has made it clear that AFCA will take a measured and considered approach to interpreting the Code of Ethics’ provisions until the establishment of the single disciplinary body to monitor and enforce the code.

“The FPA fully supports the aim of the code, which will be to improve conduct and ensure all financial planners place their clients’ interests first, and that they act in a way that is consistent with the values and standards expected of our profession.”

AFCA’s announcement, in addition to ASIC’s confirmation of its facilitated compliance approach to the new code, would provide “much-needed breathing space” for financial planners to work with FASEA on aspects of the code that required further clarification, De Gori added.

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