The board of the Financial Adviser Standards and Ethics Authority (FASEA) has taken complete responsibility for how it arrived at the final version of the adviser code of ethics, stating it ultimately relied on “input from the collective skills of management and directors”.
Amid industry rumours and speculation about who had been influential in the code of ethics development, FASEA had been asked by independent South Australian Senator, Rex Patrick to “lay out the actual internal process that FASEA went through in terms of who was involved in that final determination and how they took input from consultation and acted on it”.
Patrick asked whether the process had been “divided into subcommittees; was it one committee by consensus; was there a casting vote from perhaps you; how did it work”.
In response, FASEA made clear that formulation of the code of ethics had been all its own work consistent with the requirements of the legislation.
“The board of FASEA determined to make the code of ethics on 8 February, 2019. As part of its decision-making process for determining to make the code of ethics, the board received and gave due consideration to a range of matters including:
- Input from the collective skills of management and directors;
- Feedback from stakeholders received from two rounds of public consultation in March-June 2018 and November-December 2018; and
- Review and analysis of stakeholder feedback.
“In reaching its decision to make the code the board complied with the consultation requirements of the Section 921U(6) of the act which required FASEA to consult: a) financial services licensees; and b) relevant providers; and c) associations representing consumers of financial services; and d) professional associations; and e) ASIC and the department; and f) any other person or body that the standards body considers it appropriate to consult,” the FASEA response said.
It said that feedback received on the draft legislative instrument was further reviewed and considered by FASEA before the board resolved to make the final instrument on 8 February, 2019, ahead of a 1 January, 2020, start date.
“In making the final instrument, due regard was had to stakeholder consultation feedback received and relevant feedback was included in the final instrument to clarify aspects of the code including the values underlying the code and amending standards relating to conflicts, best interest of the client, the effects of advice on the client and adviser record keeping,” it said.