The Financial Adviser Standards and Ethics Authority (FASEA) code of ethics will be taken into account by the Australian Financial Complaints Authority (AFCA) effective from 1 January, next year.
While the Australian Securities and Investments Commission (ASIC) has signalled a facilitative approach to the code, AFCA deputy chief ombudsman, Dr June Smith said the authority would take a measured and considered approach to interpreting the code’s provisions.
Addressing the Financial Planning Association (FPA) national congress, Smith said: “AFCA will only assess adviser conduct against the Code where a complaint and the conduct has occurred after 1 January, 2020”.
AFCA considers complaints about firms who provide financial advisory services and products to consumers. This includes assessing whether the conduct of individual financial advisers employed by these firms meets legal, industry and professional standards.
AFCA will assess adviser conduct by giving the Code its practical meaning, taking into account:
- The intention and objectives of the Code as a whole and the professional standards framework from which it is derived;
- The current legislative, regulatory and professional environment within which the Code operates;
- The Financial Adviser Standards and Ethics Authority’s (FASEA) guidance on the operation of the Code’s values and standards; and
- The Australian Securities and Investments Commission’s expectations about steps Australian financial services licensees should take to ensure their advisers comply with the Code and specifically the guidance that they will take a facilitated compliance approach with respect to Standards 3 and 7 while FASEA continues to refine its guidance over the period up to the establishment of the single disciplinary body.
Smith said the Code attempted to improve adviser conduct and ensure they placed their clients’ interests first and that they act in a way that is consistent with the values and standards expected of a member of a profession.
“Fairness underpins everything we do at AFCA. In assessing what is a fair resolution of any complaint, AFCA will assess whether the financial firm and its adviser have reasonably met that standard, being mindful that the interpretation of the standard is still being refined via consultation and ongoing rounds of guidance,” Dr Smith said.
“AFCA will continue to use its panel of financial advisers and consumer advocates to assist it in assessing whether financial advisers have met the standards of conduct expected of them by the community and under the Code.”