Membership of a code of conduct is not an easy option for opt-in compliance, and does not reduce your personal responsibilities as a financial adviser.
This is the message to come from ASIC following the release of a consultation paper on its approach to code approval and relief powers under the FoFA reforms.
“Obviating the need for opt-in via subscribing to a code does not mean financial advisers will suddenly have no responsibility or obligations in this area,” said ASIC Commissioner Peter Kell.
“We expect codes will contain provisions that require members to have active obligations towards their clients that will achieve the same outcome as the opt-in requirement intends to achieve. That is, to prevent disengaged clients from paying ongoing advice fees for services of little or no value.”
The paper, Future of Financial Advice: Approval of codes of conduct for exemption from opt-in requirement, is relevant to advisers and industry representatives who are considering submitting either a new or existing code for approval. Topics of discussion include:
appropriate content of a code submitted for approval, including methods to obviate the need for opt-in;
administration, governance, monitoring and enforcement of codes; and
ASIC’s approval and relief process.
ASIC will consider applications for approval of a FoFA code once final policy is published. The regulator noted that code approval process will be “careful and rigorous” – and it will take months rather than weeks for ASIC to assess a code.
Unless a licensee opts in to the FoFA regime before 1 July 2013, the earliest date an adviser would need to comply with the opt-in requirement, or join an approved code, is 1 July 2015.
“We encourage advisers, industry code representatives and consumer representatives to have their say, and are particularly interested in feedback about whether ASIC should modify its existing approach to defining what is a code in RG 183 for a FOFA code,” said Kell.
Submissions close on 3 December 2012.
Meanwhile, ASIC has stated that it will be taking a so-called “facilitative approach” to the implementation of FoFA – and has reaffirmed that it will take this approach during the first 12 months of the FoFA reforms from 1 July 2013.
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