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.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
