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FASEA Ethics Code could’ve prevented RC misconduct

Following the Financial Adviser Standards and Ethics Authority (FASEA) Code of Ethics could prevent misconduct of the type uncovered by the Banking Royal Commission even though they aren’t subject to legal penalties, former chief executive of the body, Deen Sanders, has said.

Breaches of the Code would not be subject to criminal or civil penalties, but instead come under the remit of monitoring bodies, which would have investigative powers when it came to breaches or potential breaches.

“Institutions will instead need to increase the focus on ethics, professionalism, individual accountability, and culture to avoid breaches of the Code,” Sanders said at the SMSF National Conference this morning, arguing that “codes of ethics should be above the law, they should be aspirational”. This latter point was also made by Commissioner Kenneth Hayne.

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Sanders pointed to the Code’s first standard, which requires advisers to act in accordance with the law and not try to circumvent its intent, as especially prohibitive of the misconduct heard by the Royal Commission.

“It requires that you must not seek to avoid the Code,” Sanders said. Such behaviour was rampant in the behaviour revealed before the Royal Commission, Hayne found, and Sanders said that the industry had looked at how it could get around rules rather than how it could meet them.

“Now even by having a conversation about that could prove a breach of the Code,” Sanders said.

A second theme to much of the poor conduct brought before the Royal Commission, and the subject of several recommendations, was that of conflicted advice and commission schemes.

Both Standards Two and Five of the Code could have prevented some of this misconduct, with the former preventing advisers from acting where they have a conflict of interest, and the latter requiring that all advice and financial product recommendations must be in clients’ best interests, appropriate to their circumstances, and understood by the client.

Sanders also said that the Code of Ethics’ provisions could be broadly grouped under the goals of ethical behaviour, quality process, client care, and professional commitment.




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Ha! You're under the assumption that the very small minority of unethical people would adhere to a codes of ethics. This would happen in any occupation, industry or society. The large majority of advisers practice moralal and ethical behaviour, and no amount of codes or rules would change this. It's the reason we chose this job... to help people!!!

I have been in this industry for over 15 years and have NEVER had a complaint, ethics arent taught they are inherint in character. Dont these self interested barrow pushers understand this? This guys time at FASEA was a massive waste of my money as a planner, and tax payer ,and this code of ethics is a crock of crap, its a wish list thought up by those with no real life business acumen that is so far out of reality uranus cant even see it. So says the majority that have never done anything wrong and run successful businesses without slagging others off to try to justify their own existence.

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