The Financial Adviser Standards and Ethics Authority (FASEA) has released its Code of Ethics for financial advisers going forward.
The Code addresses trust, competence, honesty, fairness and diligence, with all advisers acting consistently with these values at all times.
The 12 standards in the Code of Ethics are split into four categories - Ethical Behaviour, Client Care, Quality Process, and Professional Commitment.
This is a summary of each standard.
You must comply with your legal obligations and not avoid them, as an ethical duty.
Act with integrity and in the best interests of each client - speak frankly and honestly, keep your promises, and honour your commitment to your clients.
Recommend only products or services that meet your client’s objectives, financial situation and needs, with their long-term interests taken into account. Researching and confirming these elements is a key part of client care and failing to get this information is still unethical.
Keep client information confidential, treat all clients with respect, and split your time between clients fairly.
Disclose conflicts of interest or duty, but you must be judicious in referrals if you might benefit. Disclosing advantages that you receive does not relieve you of this duty.
Consent must be obtained for all services provided, which requires a clear and simple explanation of terms, services, products and records.
You must be satisfied, with reasonable grounds, that the client understands the benefits, costs, and risks.
You must ensure your client understands the advice and recommendations you have given.
You must take into account the broader effects of your advice on a client, including on their family and their broader future.
Your fees and charges must be explained in full, including who benefits in both monetary and non-monetary ways.
You cannot receive third-party benefits for acting for a client unless the Act expressly allows.
Your fees and charges must be reasonable and offer your client value for money.
Keep complete and accurate records of advice and services provided.
All services provided must not be misleading or deceptive, and be provided in good faith and competence.
Develop and maintain a high level of relevant knowledge and skills and meet the continuing professional development requirements.
There is a duty to cooperate with any investigation of a breach or possible breach of the Code by a monitoring body or ASIC.
Be supportive and aligned to the profession as a whole being seen as an ethical profession.