20,000 words axed from FPA code as group moves to principles-based regulation

The Financial Planning Association of Australia (FPA) has announced it has updated its professional code (the FPA Code) to support its members in “continuing to uphold the highest standards in their dealings with clients, other professionals, and regulators”.

A total of 20,000 words have been axed from the group’s previous rules-based system into a one-page, principles-based code, organised under three pillars:

• Being - the FPA Code outlines the principles of putting the client first, integrity, objectivity, and fairness
• Knowing - skills and knowledge, and continued professional development (CPD)
• Doing - professional behaviour, competence, diligence, and confidentiality and data protection.

The FPA said a key element in the code is that members must be “placing the client's interests first, in line with the requirements of relevant laws and regulations, [as] is a hallmark of professionalism” and that members’ actions “are aligned with promoting a culture that supports and requires integrity in others”.

FPA CEO Sarah Abood reiterated the importance of the requirement, saying it goes beyond acting ethically between members and their clients.

“We included promoting a culture of integrity in the code to highlight that ethical principles apply at all levels, including those in senior positions who have the most influence over the culture of their organisation — not only client-facing practitioners,” Ms Abood said.

The FPA head added that the move to a principles-based regulation mirrors the approach to industry regulation proposed in the upcoming Quality of Advice Review (QAR).

“We take our professional standards extremely seriously, and the FPA has an internal specialist team as well as an independent Conduct Review Commission involved to oversee our response to complaints against members,” Ms Abood said.

“We act quickly when issues are raised, to ensure due process and uphold the standards that our members expect their colleagues in the profession to achieve.

“This issue was raised by members during consultation on the new Code, who feel strongly that it’s important that ethical behaviour is supported at all levels of an organisation.”

The move comes just a week after the FPA announced its intention to merge with fellow industry group, the Association of Financial Advisers (AFA), with plans to officially launch in 2023.

In a media briefing, FPA chair, David Sharpe, said that both groups are committed to delivering a “stronger united voice for the profession”.

It was also noted that the current intention is for Ms Abood to take on the role of CEO in the merged company, while AFA CEO Phil Anderson would work as general manager.

It is expected that members of both associations will vote on the proposal by the end of this calendar year.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.