ASIC urges advisers to flag FASEA concerns

In releasing its approach to ensure adviser compliance with the code, ASIC said it expects licensees to take reasonable steps to ensure that their advisers comply with the code and include the following systems and processes:

• making sure that their advisers are aware that they need to comply with the code from 1 January 2020 onwards;
• providing training and/or guidance to their advisers on the types of conduct that is consistent/inconsistent with the code;
• facilitating individual advisers’ ability to raise concerns with the AFS licensee about how the licensee’s systems and controls may be hindering their ability to comply with the code, and acting on those concerns where appropriate;
• considering whether advisers are complying with the code as part of their regular, ongoing monitoring of adviser conduct; and
• when it is in place, considering the decisions of the new disciplinary body and making any necessary changes to their systems and processes.

ASIC said it will take into account the context in which licensees operate, including the regulatory environment, the timing of guidance provided by FASEA about the meaning of the code, and the evolving industry understanding about the meaning and implications of the code.

Licensees will still be required to take reasonable steps to ensure that their financial advisers comply with the code from 1 January 2020, and advisers will still be obliged to comply with the code from that date onwards.

However, while ASIC said it may take enforcement action where it receives breach reports, it added that it will not be monitoring or enforcing individual advisers’ compliance with the FASEA code.

“Under the Corporations Act 2001, ASIC does not have a role as a code monitoring body and is specifically prevented from exercising its power to ban an adviser for breaches of the code,” the regulator said.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

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You can contact him on [email protected].