FASEA code more legal than ethical
The Financial Adviser Standards and Ethics Authority’s (FASEA’s) new Code of Ethics has the industry surprised with the duplication of current obligations under Chapter seven of the Corporations Act.
Speaking with Money Management, associate professor at Deakin University’s Business School, Adrian Raftery, said he was concerned the Code imposed more legal obligations as opposed to ethical duties.
“There was definitely improvement in the wording from the previous [draft], however we’re pretty concerned that a lot of the best interest duty, remuneration, misleading and deceptive statements – its more Chapter seven of the Corporations law,” he said.
He suggested given the legal obligations the Code imposes, and should the Authority be “heading down that route”, the name should be changed to ‘Code of Professional Conduct’, rather than ‘Code of Ethics’.
Raftery said he also hoped for a bit more depth, given other Codes tend to provide more detail in their definitions.
“There seemed to be a lot less detail in this draft Code than what you probably would have expected,” he said. “We expected a bit more substance, a bit more guidance for advisers or relevant providers as they’re going to be.”
Deakin Business School suggested the Code of Professional Conduct should have incorporated issues like record-keeping; confidentiality; transfer of clients to other relevant providers; custody of client assets; anti-money laundering procedures; and fees.
AUTHOR
Anastasia Santoreneos
Recommended for you
ASIC has permanently banned a former Perth adviser after he made “materially misleading” statements to induce investors.
The Financial Services and Credit Panel has made a written order to a relevant provider after it gave advice regarding non-concessional contributions.
With wealth management M&A appetite only growing stronger, Business Health has outlined the major considerations for buyers and sellers to prevent unintended misalignment between the parties.
Industry body SIAA has said the falling number of financial advisers in Australia is a key issue impacting the attractiveness and investor participation of both public and private markets.
