The Financial Adviser Standards and Ethics Authority’s (FASEA) updated guidance on its code of ethics has strict wording of the standards and the more nuanced wording of the intent and guidance are incompatible, the SMSF Association believes.
The SMSF Association said while it was supportive of the code’s intent, the authority needed to “resolve all doubt”.
The association’s chief executive, John Maroney, said: “…in our opinion, the code would be improved if many of the standards were amended to reflect the ‘intent’. Ultimately, it is only the written Code that is determinative, particularly years into the future.
“The intent of Standard 3, which references the ‘client’s best interests’ while the actual standard doesn’t, is a perfect example. Until the standards in the code of ethics are amended, the industry will continue to refer to the written Code as determinative.”
The association also called on FASEA to issue further guidance on how a financial adviser could provide single issue or scaled advice that complies with its code of ethics.
“We believe a key challenge for the advice sector is how to service clients’ advice needs that may be limited to a single issue or for scaled advice needs, for example, superannuation. This is particularly pertinent for SMSF [self-managed superannuation fund] advisers and SMSF trustees,” Maroney said.
“Therefore, we support that aspect of the guidance that says the code is not seeking to prohibit this type of advice – only to ensure that it is provided where appropriate.
“However, we believe the guidance needs to provide advisers with clarity on ‘how’ this type of advice can be provided. The way Standards 2, 5 and 6 apply practically for advisers acting under a scoped authorisation or a limited AFS licence remains unclear.”
Comments
FARSEAcal seriously has no idea of the Real world & Real Advisers.
Canberra Bubble Bureaucratic Morons lost in their own self importance of more BS RED TAPE REGS !!!!!!!!!!!
FARSEA - you fail everyone of your own Values and Standards. Just Pathetic.
Let's be honest. The code is a pisstake written by a bunch of bureaucrats who don't have real-world financial planning experience who let the power go to their heads, and who thought they could ram through extreme, theoretical nonsense without properly consulting or researching the impact on practitioners and consumers. As a reward for the damage they have done, and the frustration caused to the government, their funding will be cut in May next year, and replaced by a department in the new disciplinary body, where practicing advisers will (hopefully) get to have a say in the way it operates. Thanks for the memories FASEA board, now GTFO.
Great to see the SMSF Association and AFA both focusing on the key issue, which is that the Code itself must be changed. No amount of guidance will ever resolve the ambiguities and impracticalities in the Code as it is currently written. Particularly when that guidance comes from an agency that has no role in enforcement and is unlikely to exist in a couple of years.
C'mon FPA, join with the other associations, and present a united front in calling for the Code itself to be changed.
Thanks for nothing FASEA! Enjoy working through the centrelink regulations and don't let the door hit you on the way out!
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