Our latest poll is based on the confirmation from ASIC, in releasing its code of conduct consultation paper this week, that any complying adviser codes of conduct ‘… should not be seen as an easy option for compliance’. We are asking:
Are you now more likely to join an adviser association (or retain your membership) in order to operate under its complying code of conduct?
Earlier this year, a riskinfo poll found qualified support from most advisers for the notion of a class order relief on FoFA’s client opt-in requirements if they operated under a complying code of conduct. But with the release this week of ASIC Consultation Paper 191 (see: ASIC Releases Code of Conduct Guidance) the regulator confirmed that any association code of conduct will need to observe similar benchmarks as those set down for opt-in requirements under the FoFA legislation. ASIC Commissioner, Peter Kell, said:
We expect codes will contain provisions that… will achieve the same outcome as the opt-in requirement
‘We expect codes will contain provisions that require members to have active obligations towards their clients that will achieve the same outcome as the opt-in requirement intends to achieve. That is, to prevent disengaged clients from paying ongoing advice fees for services of little or no value.’
If any future adviser association code of conduct will require similar processes for renewing client advice arrangements as those stipulated under FoFA’s opt-in rules, will this have any impact on your attitude or approach towards adviser association membership?
One argument that has been previously advanced by advisers is that they would much rather operate under a self-regulated industry regime rather than have to comply with government rules and regulations. But other advisers have pointed out that the cost of delivering financial advice to the consumer would be driven up by the increased membership fees they expect would be instituted by associations in order to cover the costs of monitoring and maintaining adviser compliance with their respective codes.
Opt-in, or its equivalent requirement under an association code of conduct, will be an inevitable component of the new financial advice landscape. Some advisers will gravitate more towards ensuring they join an adviser association (or retain their existing membership) in order not to have to observe opt-in as required under FoFA. But for others, it may have little to no impact on their intention to join, or retain their membership of, an association offering a complying code of conduct.
What are your own views? Will the introduction of codes of conduct lead to a significant increase in membership of adviser associations? Or will it have little to no impact? Tell us what you think…
