AFA welcomes ASIC’s approach to Code of Ethics


Phil Kewin

The Association of Financial Advisers (AFA) welcomes today’s announcement from the Australian Securities and Investments Commission (ASIC) outlining the regulator’s approach to licensee obligations for the Financial Planners and Advisers Code of Ethics 2019 (the Code).

AFA CEO Philip Kewin said, “The AFA, along with a number of other professional associations, has been actively engaging with key stakeholders, including the Government and ASIC, on an ongoing basis, and we are pleased to see ASIC announce what we believe is a sensible step towards achieving a workable outcome.”

The ASIC announcement said the regulator will not be monitoring or enforcing individual adviser compliance with the Code, as it does not have a role as a code monitoring body under the Corporations Act, however, the announcement did outline the reasonable steps the regulator expects licensees to take to ensure their advisers comply with the Code.

“ASIC’s outlined approach puts forward  pragmatic guidance that gives licensees and advisers the level of confidence  necessary for a 1 January 2020 commencement of the Code,” Mr Kewin said.

However, the AFA still has a number of concerns, particularly the practical workability of Standard 3 around conflicts, and the guidance around Standard 7, benefit payments and fees, but notes that after consultation with FASEA, ASIC will take a facilitative approach to compliance with these standards until the new single disciplinary body is operational. “We will continue to advocate for changes to Standard 3 and further guidance across the board, in particular with respect to Standard 7 and scaled advice,” Mr Kewin said.

“FASEA now has an opportunity to engage in genuine consultation to ensure the Code sets the appropriate standards while at the same time being realistic,” he said. “The AFA will continue to work with other professional associations and stakeholders including the Government, regulators and FASEA, to arrive at sensible outcomes that deliver trust and ethical standards that meet and exceed community standards.”

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