The Association of Financial Advisers (AFA) has formalised its practices and standards in the areas of education, professionalism and discipline with the delivery of a code of conduct to members.
AFA chief executive Richard Klipin and national president Brad Fox released the code for member consultation yesterday.
The association had worked on combining the association’s practices under a single focus for the past six to eight months, Klipin told InvestorDaily.
“It’s very much about all of us stepping up to the plate. We have a responsibility to protect our profession, our reputation and our brand,” he said, adding the code carried a strong message on responsibility.
The code also offered guidance to members and provided them with the AFA’s obligations on what constituted a professional, he said.
The AFA, through individual memberships and relationships with licensees, represents over 7000 members.
“The AFA is, has been and will continue to raise the bar on the whole area of professionalism,” Klipin said.
The introduction of the government’s Future of Financial Advice (FOFA) legislation was the catalyst for the consultation document, according to the AFA.
“In March 2012, when the government finally got the FOFA legislation through the House of Representatives, the landscape on codes of conduct changed drastically,” Klipin and Fox said in the AFA’s consultation document.
“At that time the government announced changes that would give ASIC the powers to exempt licensees from the legislative obligation to get clients to opt in if they were bound by a code of conduct approved by ASIC, which obviated the need for opt-in.
“At present there is a great deal of uncertainty as to what the implications of this announcement are and what a code might need to contain in order to get an exemption. Some groups have wrongly assumed that opt-in will no longer be an issue for the industry.”
The AFA’s code document was not designed with the intent of meeting the likely ASIC requirements, with the association calling on its members to provide feedback on its contents to help guide its direction, the association said.
Under the AFA’s code of professionalism, ethics and conduct, members will be tasked with abiding by 10 principles.
The code also addresses supervision and monitoring, with the AFA stating it would ensure all members abided by its rules by monitoring regulatory notifications and media against its membership, as well as conducting random audits of continuing professional development adherence.
It also expects an annual commitment to the code by each member and will investigate any client complaints.
The AFA complaints and disciplinary processes operate under six principles: commitment, assessable, accountable, resourced, data collection and review.
AFA members have until 31 August to make a submission with respect to the code.
“The AFA will leverage these submissions and the release of the ASIC guidelines as part of the finalisation of a new code in 2013,” it said.
To read the full AFA consultation paper to members click here.
