AFCA Supports FASEA Code


The Australian Financial Complaints Authority has announced how it will assess adviser conduct obligations under the new Financial Adviser Code of Ethics.

AFCA Deputy Chief Ombudsman, Dr June Smith

Set to come into effect from 1 January 2020, the new code will be overseen by a single disciplinary body which is yet to be announced by the Government.

Speaking at the FPA 2019 Professional Congress last week, AFCA Deputy Chief Ombudsman, Dr June Smith, said AFCA will take a “…measured and considered approach to interpreting the Code’s provisions”, until the single disciplinary body is established to monitor and enforce the Code.

“AFCA will only assess adviser conduct against the Code where a complaint and the conduct has occurred after 1 January 2020,” she said.

AFCA stated it will assess adviser conduct by giving the Code its practical meaning, taking into account:

  • The intention and objectives of the Code as a whole and the professional standards framework from which it is derived
  • The current legislative, regulatory and professional environment within which the Code operates
  • The Financial Adviser Standards and Ethics Authority’s (FASEA) guidance on the operation of the Code’s values and standards and ASIC’s expectations about steps Australian financial services licensees should take to ensure their advisers comply with the Code and specifically the guidance that they will take a facilitated compliance approach with respect to Standards 3 and 7 while FASEA continues to refine its guidance over the period up to the establishment of the single disciplinary body

“Fairness underpins everything we do at AFCA,” said Dr Smith. “In assessing what is a fair resolution of any complaint, AFCA will assess whether the financial firm and its adviser have reasonably met that standard, being mindful that the interpretation of the standard is still being refined via consultation and ongoing rounds of guidance.”

…this announcement “…provides the much needed breathing space for financial planners to calmly work through the remaining areas of uncertainty with FASEA over 2020.”

The FPA has welcomed AFCA’s statement, with CEO, Dante De Gori, saying, “Dr Smith has made it clear that AFCA will take a measured and considered approach to interpreting the Code of Ethics’ provisions until the establishment of the single disciplinary body to monitor and enforce the Code.

He added this announcement, along with ASIC’s earlier confirmation on its facilitated compliance approach to Code Standards 3 and 7, “…provides the much needed breathing space for financial planners to calmly work through the remaining areas of uncertainty with FASEA over 2020.”

The FPA stated it will continue working with AFCA on the FASEA Code of Ethics and will shortly develop further tools and resources to assist members in understanding and building compliance with the Code.


  1. I suppose I am watching all this FARCEA nonsense with a strange detached bemusement. I hesitate to say “bemusement” as I know how hard this is for many advisers. It would be hard for me too, if I was to elect to stay in the ‘industry’. I’m 58 and a while back I chose to be a risk specialist. I’m a fully qualified planner but enjoy and believe strongly in the place of risk management in a client’s portfolio. I had all good plans to continue for as long as my good health would let me – 70+, no problems. However I am dismayed, disappointed and, frankly disgusted at the life companies, politicians and vested interest special interest groups (we all know them) and the wayt they ALL sold advisers up the creek with LIF (commissions and responsibility periods). The FPA and AFA should be abjectly ashamed of themselves that it has all gone this far.
    I am not in the least concerned about study for these wholly unnecessary exams (for me as a riskie) as I will not be doing any of them. I refuse to do this idiocy. Why would I? TENS OF THOUSANDS OF DOLLARS of mine and untold hours away from family, business and clients into the coffers of self absorbed universities for these ‘courses’ and extraneous exams. For what? All of it will be of ZERO help to me or my clients in the management of their life, trauma and income protection advice. Is FASEA (or anybody) telling me I need more education about FP to help clients with simple risk products at great expense. It is like doctors being told they need to upskill to neurosurgery level – patently ridiculous. These paid-for govt clerks are going to destroy our once great industry, mark my words fellow advisers. FASEA et al would have me study and pay a billion bucks to learn about derivatives, international currency exchange rates, CDs and all manner of high level complex financial planning.
    I’ve never taken a fee from a client in all my 35 years in the industry. I have ALWAYS been completely transparent with clients in conversations about how I get paid and how commissions work. My clients are ALL happy to work with me under the commission basis. Way before SoAs and CARs I had the conversations with clients – nothing new for me. What is new is this ridiculous over the top compliance and exam system that will be the reason for me leaving my precious clients decades ahead of time. I’ll be OK -n sell my client base and retire very nicely than you. But it didn’t have to be this way and, again, I’m disgusted that the above mentioned entities have made it so.
    The life companies are in for a rude awakening – take it from someone who has watched and worked with them intimately for 35 years. There’s hardly a single executive today that doesn’t believe life cover will sell itself using Roboadvice. They want advisers gone to save on commissions – but we can easily see the outworking of that currently with their success in lowering coms and extending claw-back in LIF. These duplicitous life companies cannot be trusted on any level. Hold that thought as it will possibly save you some angst as you travel forward. See you on the other side . . .

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