Codes of conduct spark debate
Professional codes of conduct obviating the need for opt-in dominated a debate around professionalism in advice at the Financial Services Council conference, with the regulator currently unable to provide clarity on some key licensee concerns.
Infocus managing director Darren Steinhardt asked the panel how a licensee can avoid bearing the brunt when authorised representatives belonging to one or more industry bodies are bound by different and potentially conflicting obligations, and whether to avoid confusion we may end up with licensees implementing their own codes.
In reply, Australian Securities and Investments Commission (ASIC) senior manager Nick Coates said there seemed to be a tripartite relationship developing between the code bodies, professional bodies and licensees, but he could not currently give a definitive answer about licensees providing codes.
A current challenge for ASIC is harmonising these codes and ensuring they are all of similar standards, and fleshing that out what that means for licensees. The initial consultation paper should be out later this month, he added.
Association of Financial Advisers chief executive Richard Klipin said the industry needed to get to a point where professionalism and codes of conduct were a matter or "hygiene", where it was simply done and expected rather than being a topic of debate.
Klipin questioned why the financial planning industry was collectively mounting separate efforts in this area with so much overlay rather than putting in a collaborative effort like the accounting profession.
"You'll either force licensees to go it alone, or force people to choose one association over the other," Klipin said.
He added the "obviate" piece had seemed to give codes a bad name where they were being thought of as a way around opt-in, whereas in reality, codes should simply be good guidance.
Financial Planning Association chief professional officer Deen Sanders said one of the great challenges for the industry is that the Government believes they can create professionalism but that's the role of the industry, not the Government, he said.
"This is where professions and legislation tend to part company. Professions see this more holistically," Sanders said.
"Professions try to resolve issues of conflict, so we need to deeply understand what those issues of conflict are. That is a more appropriate response than trying to navigate legislation," he said.
AUTHOR
Staff Writer
Recommended for you
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
WIth only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.
As the government announces a public inquiry into the collapse of Dixon Advisory, risk adviser Richard Silberman has detailed the three areas that typically lead to an AFSL's collapse.
