In a release, AFA chief executive Brad Fox said that allowing licensees to create their own codes of ethics and appoint external parties to monitor and enforce them is likely to result in unnecessary duplication, and could give rise to serious conflicts of interest.
Mr Fox said further that the financial advice market already has access to robust and effective codes, such as the AFA’s Code of Conduct: Principles of Practice (the Code).
“Members of the AFA adhere to six principles of professionalism that form the basis of the AFA Code of Conduct,” said Mr Fox.
“They were developed through an extensive cross-industry collaboration so as to be appropriate to our members and their clients, and to effectively set expectations for ethical and professional conduct above and beyond the letter of the law. If licensees were to create their own codes, monitoring and resolution procedures, we believe it would be akin to reinventing the wheel.”
Mr Fox said that if the approach outlined in the draft legislation were to be adopted, then the regulator would need considerable additional resources to assess numerous, possibly hundreds, of requests for approval of codes and/or third-party monitoring organisations.
The explanatory memorandum released with the draft legislation suggests an industry cost of at least $165 million.
“We are also very concerned about the perceived and real conflict of interest that would be created by allowing licensees to have their own codes, albeit with a third-party monitoring service,” he said.
“This would mean licensees would need to sanction themselves for failure to adhere to their own code. We don’t see this as best practice for an industry in the process of establishing itself as a recognised profession.”
Again the consumer will pay meaningless people will be able to afford advice and all in the name of ‘red tape’
This is like having a meeting for the sake of a meeting, then having another meeting to arrange the next meeting!!!
Surely its simple – we have ‘best interests’ if an adviser cannot demonstrate that they have acted in the best interests of their clients then they should be booted out!
I am sure there will be different degrees of poor advice so it could range form a fine to a suspension to completely out of the industry
Why do we keep adding layer upon layer to protect clients from rogue advisers – kick the rogue ones out and not burden the rest of us.