70% of advisers suspicious of code
Fewer than 30% of advisers who responded to a Money Management survey believe they can adhere to the Financial Adviser Standards and Ethics Authority (FASEA) code of ethics as it currently stands.
The survey, completed by more than 150 respondents, revealed that only 26.24% believed that they both understood and could adhere to the code of ethics, with many suggesting that in its current form it placed them at considerable risk.
Asked to explain their negativity about the code, many respondents expressed the view that it had be weighted against their interests.
Typical of the responses was one which stated: “Nobody can adhere to the code. It is deliberately and malevolently designed to be impossible to comply with so that no adviser will stand any chance in the face of any complaint”.
The same respondent said: “You will always at least fail standard 3 because you will always have greater than 0% conflict and the standard is all encompassing. Advisers will be nothing but fodder for consumers, regulators and lawyers”.
Another stated: “Too much ambiguity around the standards. Too much room for FASEA, ASIC and others to apply their own judgement”.
A further respondent wrote: “The code bans 80% of my income and I have haven't been given enough notice to change my business model. What is FASEA thinking?”
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
