The Financial Adviser Standards and Ethics Authority (FASEA) has released the content of an Australian Securities and Investments Commission (ASIC) submission dealing with the adviser code of ethics including the regulator’s view of the controversial Standard 3.
The ASIC submission was released by FASEA in the context of answering a question on notice during Senate Estimates and reveals that ASIC was urging further guidance around Standard 3, in the form of examples of the kind of conduct that would fall outside the standards and “would best encourage improved behaviour by financial advisers”.
“We query whether ‘and as an independently minded professional’ is a necessary addition to the standard. It appears to mean something different from acting with "personal integrity". Should it be identified in a separate standard?” it said.
The ASIC submission outlined by FASEA also expressed concern with respect to there being room for differing interpretations as to what conduct is being carried out.
It also stated: "...our reading of the code is that it should apply to relevant providers even when they are dealing with wholesale clients. While, to be a relevant provider, a person must be authorised to give advice to retail clients, relevant providers may also regularly provide advice to wholesale clients. If it is the case that the code is intended to apply to services provided to wholesale clients, we think this would benefit from further clarity in the code.
“Similarly, we understand that the code is intended to apply to relevant providers even when they are providing services other than personal advice (e.g. general advice). While this is implied in some of the standards to an extent, it would be worth making this clear in the code”.
The FASEA answer to the question on notice when live on the Parliamentary website this afternoon after yesterday being deemed “late” and “unanswered”.
FASEA also indicated it was reviewing its ability to make submissions from financial advisers and other respondents to its consultation process publicly available on its website.