FPA/IFSA code a success

An industry review of the Code of Practice on Alternative Forms of Remuneration has found local licensees and planners have adapted well to the disclosure regime.

An assessment by the Financial Planning Association (FPA) and Investment and Financial Services Association (IFSA) has revealed almost universal compliance levels, demonstrating that the code, which was adopted two years ago, has improved disclosure and furthered best practice.

“The review has reinforced the fact that the code is working effectively and that consumers can feel confident in the transparency of alternative forms of remuneration, with registers available for inspection from all those who accept ‘soft dollar’ remuneration,” FPA chief executive officer Jo-Anne Bloch said.

“While the results are pleasing, we will remain vigilant, and the joint oversight committee will maintain regular and ongoing monitoring of compliance. If and when required, we will update the code in line with best practice.”

In response to questions raised by members, the committee agreed that the FPA and IFSA should provide guidance to their members.

The committee confirmed members should hold ‘nil return’ registers, even if they don’t operate any alternative forms of remuneration, in order to avoid confusion; registers should be available to all members of the public; and copies of the register should be provided when requested.

IFSA chief executive officer Richard Gilbert said: “We are delighted the code is proving to be effective. This assessment demonstrates the efficacy of industry standards and the importance placed on them by members of both organisations.

“Media focus on adviser remuneration and periodic testing of the registers by investigative journalists also indicates that the code is working well, however, this joint IFSA/FPA assessment was important to establish that the code doesn’t warrant an extensive overhaul,” he said.

The assessment of the code was conducted at the end of last year. The assessment included analysis of both the FPA’s and IFSA’s 2005-06 compliance processes and a survey of both FPA and IFSA members.