AFA: Cracking the Code of Consumer Confidence
As the industry moves towards an era of greater professionalism, robust Codes of Ethics and higher educational standards are only the beginning, according to the Association of Financial Advisers (AFA).
“In times of great change, people not only need formal direction, they also need support, encouragement, inspiration and leadership,” said AFA CEO Richard Klipin.
“Leadership of the financial advice industry is about setting standards and raising them; it is about improving educational standards, it is about formulating robust Codes of Ethics and ensuring members abide by them,” he said. “But more importantly, it is about standing true to what we believe in and advocating for advisers and for the profession as a whole, because we are all in this together.
“The AFA’s view is that the most effective way to help advisers to adapt to the new world is through leadership – a carrot rather than a stick approach.”
Mr Klipin said the industry has a collective responsibility to support each other.
“We all have this obligation,” he said. “Advisers, licensees, professional associations, regulators and the government and it all starts with the way we engage with and support each other.”
Mr Klipin said that the AFA has witnessed a genuine commitment on the part of licensees and advisers towards improving standards.
“Throughout the Future of Financial Advice debate we saw, via the AFA’s Licensee Leadership Forum, how serious licensees are about helping their advisers to raise professional standards,” he said. “We are very supportive of their efforts and we hope that by holding them up to the mirror, we are helping them to raise the bar in the delivery of financial advice.”
Mr Klipin said that professionalism is so much more than just hanging a certificate on a wall. “It is about the way members of the industry conduct themselves, how they behave and the personal standards and the personal ethics they subscribe and adhere to.”
The AFA’s Code of Ethics has a client-first focus which recognizes that the position of the financial adviser is unique.
“Our Code stipulates that the financial adviser owes a professional duty towards clients and must act at all times in their best interest,” Mr Klipin said. “By observing the highest ethical standards, the financial adviser can ensure their clients’ needs are satisfied.”
The AFA is also currently in consultation with members on the AFA’s Principles of Practice, a document which takes the Code of Ethics and provides a road map for advisers to put the Code into practice.
AFA President, Brad Fox said advisers will come out of the current challenging period more resilient and more resolute. “However, they now need to make a decision,” he said, “and the decision is around affiliating to a professional body that holds true to their interests and the interests of their clients.”
Mr Fox said that with only two in 10 Australians currently receiving financial advice, now is the time for advisers to step up to the plate.
“We need to ensure that advisers hold themselves to the highest set of ethics and professional conduct,” he said. “Once we crack that code, more Australians will seek advice, more Australians will be better protected and more Australians will be better prepared for their retirement – and that’s good news for everybody: consumers, advisers and the country.”
