ASIC releases guidance on codes of conduct
The Australian Securities and Investments Commission (ASIC) has provided guidance on codes of conduct, which includes a checklist of content which would obviate the need for complying with the opt-in requirement.
ASIC said there were a number of ways in which a code might obviate the need for opt-in, such as entering into an ongoing fee arrangement, delivering services under the arrangement and renewing it.
If an adviser enters into an ongoing fee arrangement with a client, they would have to conduct a regular review of that arrangement at least every three years.
The review would include:
- a review of the advice and strategy provided, and the client's circumstances, portfolio and risk profile;
- a review of services agreed and delivered to the client to date; and
- an assessment of the ongoing suitability and relative benefit of those services to the client.
"Renewal arrangements under an approved code do not have to match the opt-in requirements under the law," ASIC stated.
"For example, there may be different requirements about how advisers communicate with their clients and a wider range of options about how they seek the client's consent to the ongoing arrangement."
ASIC Commissioner Peter Kell said approved FOFA codes must meet the same policy objective as opt-in.
"That is, they must promote client engagement and ensure clients do not pay ongoing financial advice fees where they are receiving little or no service," Kell added.
ASIC confirmed it would not accept applications coming from single licensees or dealer groups, and introduced a requirement that an administrator of a FOFA code must maintain a public register of members.
The regulator has also confirmed that it will, for purposes of FOFA only, accept an application for approval of a code with limited content.
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