The major advice member associations, the FPA and AFA have continued their calls for a delay in the implementation of the FASEA Ethics code, which is due to take effect on January 1 next year. With further guidance around the code resulting from recent consultations yet to be released, the argument is the lack of clarity and late guidance will make it too hard for advisers to be compliant. The recent “monitoring relief” offered to licensee’s does not change the fact that currently, advisers will still have to be code compliant at the start of next year.
The FPA head of policy and standards Ben Marshan told Financial Standard that although it was a relief to licensees that they no longer had to ensure financial planners were registered with a code monitoring body by the end of the year, it was important to be clear that compliance with the code will still be necessary from 2020 at this stage.
With time running short before the January 1 deadline, Marshan said "this creates an issue given the Financial Adviser Standards and Ethics Authority has acknowledged they need to reissue the guidance because it still isn't clear what FASEA's intent with the code is and how it should be interpreted." The FPA is seeking an extension to compliance with the code, arguing that a lack of clarity and late guidance will make it too hard for advisers to be compliant.
In addition, AFA’s general manager, Policy and Professionalism, Phil Anderson claims that FASEA has acted beyond its legislative remit, not only in terms of the code of ethics, but also with its prescribed expectations around degree qualifications. Rather than complying with the statements of the Parliament in the Explanatory Memorandum that related to the 2017 passing of the Professional Standards for Financial Advisers Bill, according to Andersons analysis - FASEA have sought to set the education standards at a much higher level. Furthermore, his analysis said “[FASEA]… are not recognising many older Diploma level courses or Continuing Professional Development as specifically referred to in the Explanatory Memorandum”
Anderson’s analysis around recognition for older diploma courses and CPD was used in response to comments by FASEA Chief Executive Stephen Glenfield, who said "We've recognised [financial advisers'] continuing professional development where you can benchmark it at bachelor level or higher." Anderson has argued that nothing in the Bill or memorandum precludes recognition at a lower than bachelor’s degree level – or includes that only CPD undertaken at the bachelor’s degree level could be counted towards the education standard," hence FASEA is acting beyond its legislative remit, because it was apparently limiting recognition of CPD only for bachelor level or higher.
There are plenty of advisers around who feel like they are being stitched up and forced to seek higher educational qualifications than they otherwise should. Conspiracies around FASEA acting inappropriately due to some affiliation with education providers and the continued confusion around the ethics code and its application do nothing to assuage many advisers feeling that they’ve been served a raw prawn. That these issues are not adequately bedded down (at least in the eyes of many advisers and the member associations), with only a few weeks to go prior to the new year add to the narrative that, in the words of one adviser – “the whole thing is a shit show and advisers who want to stay in the game have no option but to cop it”.
Advisers know that change is coming, but would argue it is common sense to delay the implementation of the code for a few months - at the very least to get better clarification to ensure they do not drift into ASIC's "litigate first" strike zone.