Call for clarity on 'one code for all'

Angus Dale-Jones, independent PAA board member and compliance expert, spoke at the association’s recent board meeting about the submission it made on the issues paper for the Financial Advisers Act review.

The association wants the regulations changed so the Code, currently just for AFAs, would apply to all advisers. There would no long be RFA, AFA and QFE designations.

Operating under the code would mean advisers who are now RFAs and QFE advisers would have to achieve a level five qualification and undertake ongoing professional development, as well as meet higher conduct standards.

But Dale-Jones said the PAA was not lobbying for the current AFA standards to be applied with a broad brush across the industry.

He said the code would have to be refined if it was to apply beyond investment advice.

He told Good Returns he made the point to the meeting that the code would have to have to include the flexibility to apply to each advice stream.

He said there was support for the idea and a number of advisers saw the removal of the different adviser designations as inevitable.

But he said concerns were also being raised by some advisers. “There is a lot of ‘how is this going to affect me and my business?”

He said some advisers were going back and looking at qualifications they had received. “They are dusting off the qualifications they did get but haven’t converted to AFAs - others are thinking they might need to do an exam, others are more worried about how their business processes will have to change.”

Dale-Jones said it was positive and healthy that advisers were giving thought to the issues and how changes to adviser regulation might affect their businesses.

Comments from our readers

On 7 September 2015 at 7:57 am Charity said:

There are comments in the article that imply that the Code only applies to investment advice and that it would have to be changed to apply to other types of advice. I find this an incredible statement. Code Standard 1 clearly states that the Code applies to any activity of an AFA that relates to the AFA's financial adviser services. The definition of financial adviser services would include advising on insurance or mortgages or any other category 2 product. The only revision required to the Code would be to include those currently operating as RFAs or QFE advisers.

On 7 September 2015 at 2:36 pm gavin austin adviser business compliance said:

It is a common enough slip up when the code is referenced to investment advice as Charity is correct in that it applies to ALL advice provided by an AFA. There are AFAs who give advice on all aspects and some who only do risk and the Code applies to them all as correctly pointed out. If you were to change one word in the following sentence in the article "He said the code would have to be refined if it was to apply beyond investment advice". IE take out the word investment and replace it with AFA then all would be OK. I think Angus's point was that the code needs to be amended so as to capture all advice from all advisers. The key would be to link specific code standards to particular advice definitions - this is achievable but the danger could be that the code will become cumbersome and confusing. Were that to happen then for some there would be an increase in the cost of being "compliant" which is sometimes referred to by regulators as an "unintended consequence". Wouldn't it be great if they could achieve the entire review with the outcome being "less" cost(not just in $ terms but in terms of time cost as well). Or am I just hoping for a small miracle.

Call for clarity on 'one code for all'

It must be made clear to advisers that the Code of Professional Conduct would need to be tweaked if it is to apply to the entire advice industry, a PAA board meeting has been told.

Monday, September 7th 2015, 6:00AM 3 Comments

Comments from our readers

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