FASEA still under pressure on Standard 3

29 May 2020
| By Mike |
image
image
expand image

The Institute of Managed Account Professionals (IMAP) has added its voice to the chorus of voices telling the Financial Adviser Standards and Ethics Authority (FASEA) it needs to address Standard 3 of the Code of Ethics. 

IMAP has confirmed that it has lodged a nine-page letter with FASEA chief executive, Stephen Glenfield identifying key problems with the code. 

Those problems were: 

  • The conflict between certain standards and established law and regulatory policy; 
  • Inconsistency between the Code and FASEA’s guidance, particularly in relation to the way a Code Monitoring Body may adjudicate a matter under the terms of Standard 3; 
  • Inconsistency in the manner in which the Code must be applied between members of the advice profession; and 
  • The lack of a materiality test. 

In sending the letter, IMAP has joined a long list of industry participant organisations concerned about the code and, in particular, Standard 3. 

IMAP’s outline of its concerns comes just a week after the gazetting of FASEA answers to Senate Estimates revealed that the development of the code had been the result of consultations and input from “the collective skills of management and directors”. 

In a communication to IMAP members, the organisation’s chairman, Toby Potter said that in sending the letter, “we wanted to set out IMAP’s position, particularly on Standard 3 of the FASEA Code of Ethics, which we believe is structurally flawed”. 

“Importantly, we think it appropriate to note the differences between Standard 3 and the way in which conflicts are required to be addressed by other professions, like law and accounting, which have had considerably longer experience in addressing this issue.” 

The IMAP Regulatory Group is seeking a review of Standard 3, which it believes is not only important for professionals working in the managed accounts sector, but for all financial advisers. 

“Standard 3, as it currently sits, imposes a significant burden on the provision of advice. It contradicts another standard in the FASEA Code of Ethics, as well as established law,” Potter said. 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago