Standard 3 amendment likely to be only change by FASEA

Potential changes to the education authority’s code of ethics standards, except Standard 3, are unlikely given the authority will transition to Treasury and any changes this year will likely impact exams held next year.

Association of Financial Advisers (AFA) general manager for policy and professionalism, Phil Anderson, said given the Financial Standards and Ethics Authority (FASEA) existed until the end of 2021, any changes before the end of December would potentially impact exam being held next year.

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Last week, FASEA announced it was considering amending the wording of Standard 3 of the code of ethics.

However, Anderson said there was not any more time to amend other standards with FASEA given its transition to Treasury at the start of 2022.

“We’ve run out of time, Standard 3 is the one where FASEA have previously made public statement that they intend to consult on changes,” he said.

“If FASEA was to be considering changes to other standards, then I think they would have probably incorporated it within this exercise. So, I think it’s quite unlikely that they’ll be looking at any other standards.”

Anderson said there still needed to be changes to other standards or changes to guidance around the standards.

“We still have issues with Standard 4 and the expectations that they seem to put in place around existing clients giving consent, again, after the start of the new regime, and particularly when it comes to life insurance clients,” he said.

“There are also issues with Standard 7 and the definition of ‘fair value for money’. How is that to be defined when it really needs to be assessed in the eyes of the client? So, there’s still some things that we would like to have looked at and whether the solution is through the standard, or through the guidance.

“The other thing that is most commonly spoken about is scoped advice and the extent to which you need to complete a full fact find and the ability to provide limited advice in the context of the references to likely future circumstances and other matters such as that.”