A senior advice executive has warned advisers against relying on the Financial Adviser Standards and Ethics Authority (FASEA) Code of Ethics guidance document as proof of compliance with the new professional standards requirements.
Speaking at the SMSF Association Sydney Local Community Christmas function held today, Chartered Accountants Australia and New Zealand (CAANZ) financial advice leader Bronny Speed said: “The FASEA Code of Ethics guidance that came out, while it was quite useful, is a guidance document. So, according to the lawyers we’ve spoken to, if you take it to court or somebody complains, it will be what’s in the standards that will be applied.”
Speed also confirmed CAANZ still harbours concerns about how some of the standards contained in the code can be applied to accountants providing advice under a limited Australian financial services licence.
Specifically, she singled out standard 6, which states an adviser must take into account the broad effects arising from the client acting on their advice and actively consider the client’s broader, long-term interests and likely circumstances, and standard 10, requiring practitioners to develop, maintain and apply a high level of relevant knowledge and skills, as being problematic.
“For a limited licensee it’s very difficult to abide by standards 6 and 10 collectively. This is because standard 6 says you’ve got to have a look at a wider area and the impact of your advice across a client’s total situation,” she said.
“If you’ve got a limited licence, you’re actually not allowed to do that. You’re only allowed to look at what you’re licensed to do.”
She stressed CAANZ’s concerns over these two standards did not mean the accounting body or the sector was against the notion of having a code of ethics.
“We’re not against codes of ethics. No industry association nor any practitioners in this room is against the code of ethics – in fact I think everybody is for it,” she said.
“But let’s make it workable is the point that we’re trying to make.”