The Australian Securities and Investments Commission (ASIC) has revealed it is currently in the process of providing clarification on how practitioners can provide scaled advice while still complying with Standard 6 of the Financial Adviser Standards and Ethics Authority (FASEA) Code of Ethics.
“What we’re trying to do is work thorough some examples with FASEA that really [will] highlight and I think solidify the fact that scaled advice is okay,” ASIC commissioner Danielle Press told delegates during a panel session at the Stockbrokers and Financial Advisers Association (SAFAA) 2021 Hybrid Conference in Sydney last week.
“Also in [FASEA chief executive Stephen Glenfield’s] mind, and I don’t want to talk for Stephen, but he’s telling me that FASEA is saying scaled advice is fine.
“So let’s get some examples that we can put out to industry to actually get rid of this tension that we’ve got between the two because I do think it’s an artificial tension we need to get rid of.
“I think the way to do that is to work with FASEA to ensure that the examples that are actually put forward, that we’re using in our e-guides, are in fact consistent with what FASEA is saying and is compliant with their guides as well.”
Standard 6 of the FASEA code stipulates advisers must take into account the broad effects arising from the client acting on the advice given and must actively consider the client’s broader, long-term interests and likely circumstances.
During the same session, SAFAA chief executive Judith Fox reiterated the industry body’s rejection of the standard and its calls for drastic action in regard to it.
“Standard 6 conflicts with the provision of scaled advice because it asks for a full fact find. That’s an absolute conflict and we’ve said that Standard 6 needs to be removed,” Fox noted.
