While the draft FASEA Code of Ethics (the Code) is another step forward in the professionalisation of financial advice, The Advisers Association (TAA) believes the scope is too narrow, too constraining and at odds with its broader intent.

“Given that the broader intent of the Code is to meet the expectations of ‘the Australian community’ for the provision of professional financial advice, the focus within it on financial advice clients is too narrow and should be extended to include people who are not clients,” says TAA CEO, Neil Macdonald.

Mr Macdonald says TAA questions whether the narrow focus is supporting a view that quality personal financial advice will only be available to a privileged few.

“Is the focus on clients supporting a view that only intrafund or roboadvice should be available to everyday Australians, or is it an acceptance of defeat that professional advice is out of reach and not available to everyday Australians? Either way a narrow scope limits the utility and timeframe for this Draft.”

Mr Macdonald says broadening the scope to include more Australians would make it clearer to the financial advice community that being in a profession requires looking beyond their own clients.  

“It would also better align with the focus of key stakeholders, including advisers, parliamentarians and regulators, which is on meeting the unmet advice needs of everyday Australians and ensuring that quality personal advice is accessible, viable and cost-effective wherever and whenever it is required by all Australians.”

That said, he says in the current environment, the scope of the Code cannot be broadened to include all Australians.

“It is an impossible task to meet the expectations of all Australians, especially when considering recent survey results that indicate consumers want to pay no more than $500 for advice,” he says. “This is just not feasible in the current regulatory and licensee environment. In broadening the scope to include the expectations of the Australian community, we therefore need to be very clear who ‘the Australian community’ actually is.”

To read The Advisers Association’s submission to FASEA, please CLICK HERE