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Compliance, FASEA

Standard 3 changes unlikely until 2022

FASEA Standard 3

Changes to Standard 3 of the FASEA Code of Ethics are unlikely to occur this year while adviser exams are still being conducted and the authority’s functions are shifting to government.

Further changes to Standard 3 of the Financial Adviser Standards and Ethics Authority (FASEA) Code of Ethics are unlikely to take place this year while adviser exams are still being conducted, with any change likely to take effect in 2022, according to a technical specialist.

BT head of financial literacy and advocacy Bryan Ashenden said Standard 3, which deals with adviser remuneration and conflicts of interest, had attracted a high level of attention around its wording and intent from the financial advice sector, including calls to clarify its meaning or to revert to an earlier draft of the standard.

Ashenden pointed out FASEA has committed to further consultation as part of its response to questions from the Senate Economics Legislation Committee in April.

“FASEA has plans to consult on Standard 3 of the code this year and will continue to work on enhancing and refining it before operations cease,” the authority stated in response to a question as to whether it would amend the standard before ceasing operations in December.

Ashenden said it remained possible for changes to take place this year, but there would be a flow-on effect for the content of the mandatory adviser exam, which only has three more sittings remaining in 2021.

“If change was to occur during this calendar year, what does that mean for things like the FASEA exam and are we going to have people assessed against different standards?” he said.

“Also, how prepared and ready will people be to sit an exam based on a new standard as opposed to the wording of an existing standard.

“These would need to be resolved and that is a reason why it might be pushed out to 2022,” he said, noting the government had also shown a willingness to make changes to the standard, but had given no firm dates or commitments.

“The question that remains is when will those changes occur? There is no specific deadline nor any specific announcement when a change could occur.

“FASEA has said it will consult and it will pass the outcomes of that consultation through to Treasury, which is taking over those functions from 1 January next year, and that implies that perhaps it is in the new calendar year when changes may be made.”

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