This is an updated version of an article first published in February 2019.

The Financial Adviser Standards and Ethics Authority (FASEA) continues to release details and guidance to support the Adviser Professional Standards, giving the industry a clearer view on the practical operation of the reforms.


In this article we cover the following key elements of the reforms, providing an overview of the requirements and what the changes mean for advisers.

The focus here is on the impacts to Existing Advisers (those who were authorised to provide personal advice to retail clients at any time between 1 January 2016 and 1 January 2019). These Advisers benefit from transitional arrangements which are outlined below. The requirements for New Entrants (those who don’t qualify for transitional arrangements) are covered in a separate article.

We intend to update this article regularly to take into account new developments, with the aim of it being used as a valuable reference tool.

Overview

The new professional standards for financial advisers commenced on 1 January 2019. The reforms are intended to raise the education, training and ethical standards of financial advisers by requiring those who provide personal advice to retail clients to hold a degree, pass an exam, meet CPD requirements and comply with a Code of Ethics. New advisers who enter the profession from 1 January 2019 (or those who otherwise don't meet the transitional rule requirements) will also need to undertake a Professional Year.

FASEA is responsible for setting the details of the new standards.

Who is required to meet the new standards?

Financial advisers need to meet the standards if they give personal advice to retail clients on financial products, other than basic banking products, general insurance products, consumer credit insurance, or a combination of any of these products. This includes accountants who give personal advice under a limited Australian Financial Services Licence (AFSL).

For simplicity, we use the term ‘Adviser’ to refer to those who are subject to the standards.

Transitional arrangements

Transitional arrangements apply to Existing Advisers, that is, those who were authorised to provide personal advice to retail clients at any time between 1 January 2016 and 1 January 2019 (and who were not subject to a banning order or enforceable undertaking not to provide financial product advice or financial services generally on 1 January 2019).

The transitional arrangements give Existing Advisers until 1 January 2024 to meet the education standards and 1 January 2021 to pass the Exam. Existing Advisers are not required to undertake a Professional Year.

Advisers can demonstrate they are an Existing Adviser by having had a status of 'current' on ASIC’s Financial Advisers Register at any time between 1 January 2016 and 1 January 2019. Without this recognition, ASIC has stated that it will treat an Adviser as a New Entrant to the industry1.

Milestones

The timeline below shows the milestones for the key requirements of the reforms.

Continuing Professional Development

All Advisers (both new and existing) are subject to new FASEA Continuing Professional Development (CPD) standards which commenced on 1 January 2019.2 AFSL holders have certain obligations to support Advisers in meeting these requirements.

The requirements are based around a licensee’s CPD year.


CPD year
This is a 12-month period beginning on a date determined by the licensee. The CPD year can start at any time during the calendar year. The licensee has an obligation to notify ASIC of the start date.
The new requirements commenced on 1 January 2019 but a licensee's CPD year won’t necessarily commence on that date. FASEA provides for this in a way that is illustrated in the following example.
Example
An AFSL holder’s CPD year runs from 1 July to 30 June. The FASEA CPD requirements effectively bring forward the start date of the licensees first CPD year to 1 January 2019. This means the licensee’s first CPD year runs for an 18-month period, from 1 January 2019 to 30 June 2020. The FASEA standard also proportionately increases the CPD hours-based requirements to 150 per cent for this period.

Adviser obligations

In summary:

  • an Adviser needs to complete 40 hours of CPD per CPD year for those working full-time or 36 hours for those working part-time, subject to the consent of the responsible licensee
  • at least 70 per cent of the CPD hours must be on activities approved by the responsible licensee (ie 28 hours per CPD year for a full-time Adviser)
  • a minimum number of hours per CPD year must be spent on CPD categories as shown in the following table
FASEA CPD category Minimum hours per year
Technical competence 5
Client care and practice 5
Regulatory compliance and consumer protection 5
Professionalism and ethics 9
  • a maximum of four hours of professional or technical reading can be counted towards meeting the requirements
  • a maximum of 30 hours of formal relevant education provided by an education provider can be counted towards meeting the requirements

Formal relevant education
This may include:
  • a FASEA Approved Degree or equivalent qualification
  • education or training provided or approved by a professional association
  • formal education or training towards qualifications or designations relevant to practice as an Adviser.

  • record-keeping requirements apply
  • special rules will apply to Advisers who take a career break
  • Advisers are required to have a written CPD plan for each CPD year.

CPD plan
An Adviser’s CPD plan must be in place before the start of the CPD year. However, for the first CPD year, the plan was required to be in place by 31 March 2019.
The CPD plan must identify areas for improvement in, and development and extension of, the Adviser’s competence, knowledge and skills and describe the CPD activities the Adviser will complete during the CPD year to achieve those improvements. 
If the Adviser is employed by a licensee, the Adviser must give the employer a copy of the plan.

FASEA prefers education that is measurable, appropriately assessed and leads to further qualification outcomes for participants as it more likely provides structured and independent results for the participants work and training needs.3 

Licensee obligations

A licensee who is responsible for Advisers has obligations to:

  • develop and adopt a CPD policy for its Advisers

CPD policy
A licensee’s CPD policy must:
  • specify the licensee’s CPD year
  • set out the licensee’s overall approach to its CPD obligations and the CPD obligations of its Advisers
  • describe how the licensee will:
    • assess and approve CPD plans of its Advisers
    • monitor implementation of CPD plans of its Advisers
    • assess and approve CPD activities and attribute hours to them
    • ensure that at least 70 per cent of the hours counted by its Advisers are for licensee approved activities
    • check Adviser’s compliance with the policy and the FASEA requirements
    • record and maintain evidence of completion of and outcomes of CPD activities
    • ensure records are completed and maintained; and
  • be stored in a central location, such as a website, intranet or shared folder that is easily accessible by its Advisers.4
 For the first CPD year, the CPD policy was required to be in place by 31 March 2019.

  • approve sufficient CPD activities to enable its Advisers to meet the requirement that 70 per cent of CPD hours is spent on licensee approved activities

Approval of CPD activities
FASEA has indicated that it will provide a principles guide to enable consistency within the industry in how licensees assess CPD. In assessing CPD, licensees are required to consider:
  • level of expertise of the CPD provider
  • expertise of facilitators and/or those delivering the CPD
  • level of learning undertaken
  • stated learning outcomes for the CPD activity
  • volume of time in undertaking the CPD activity, and
  • approach for verification of learning outcomes achieved.

  • when approving a CPD activity, determine the number of hours that can be counted for completing the activity
  • monitor its employed Advisers’ implementation of their CPD plans
  • make appropriate resources available to enable Adviser compliance, monitor its Adviser’s implementation of CPD plans and check compliance with the CPD policy.

Licensees will also be required to notify ASIC of any Advisers that do not complete the required CPD by the end of the licensee’s CPD year. Non-compliance will be shown on the ASIC Financial Adviser Register.

Degree Requirements and Education Pathways

Unlike New Entrants who are required to have completed a FASEA Approved Degree before they can be authorised, Existing Advisers will have until 1 January 2024 to complete the required courses.

FASEA’s Education Pathways set out the range of courses that both Existing Advisers and New Entrants will need to undertake to meet the new standard.

The specific requirements of each pathway will depend on the amount and nature of education an Existing Adviser has already completed. FASEA has published detailed information on the various options available to Existing Advisers in a Policy Statement, which incorporates the recognition of prior learning and how this applies to each pathway.5

The two extremes

The minimum additional education required will be a single FASEA Bridging Course (on Ethics and Professionalism) and the maximum will be a FASEA Approved Graduate Diploma of eight subjects (however, completion of a FASEA Approved Degree containing 24 subjects will also meet the requirements).

Advisers required to complete a single Bridging Course

The single Bridging Course requirement will apply to an Existing Adviser who already holds any of the following:

  • a FASEA Approved bachelor's degree, graduate diploma or master's degree

Approved Degree

Several degrees from a range of education providers have been approved by FASEA for New Entrants which are also applicable to Existing Advisers.These cover a range of bachelor’s and postgraduate degrees, generally with majors/specialisations in financial planning. Conditions for each degree are specified, for example, particular subjects must have been completed.


  • a Relevant Degree in addition to an Advanced Diploma of Financial Services/Planning (or equivalent, including the historical eight course Diploma of Financial Planning – ‘DFP 1-8’ awarded by the Financial Planning Association)7

Relevant Degree
In its Policy Statement, FASEA indicates that this will be a bachelor’s degree, graduate diploma or master’s degree that contains at least eight courses in one or more of the following fields of study in any combination:
  • Financial planning
  • Accounting
  • Taxation/tax law (as approved by the Tax Practitioners Board)
  • Finance law
  • Finance
  • Business law (as approved by the Tax Practitioners Board)
  • Investment
  • Estate law
  • Banking
  • Economics
FASEA has opened Degree Assessment Service for a fee to give certainty to those where it is not obvious or clear that the degree meets the relevant knowledge areas. This service is available to advisers and licensees.

  • a Relevant Degree in addition to study towards a Professional Designation for which FASEA has awarded 2 credits

Study towards an Approved Professional Designation
FASEA provides recognition for completed study towards the following Professional Designations:8
Professional Designation details Credits awarded by FASEA
Financial Planning Association’s 5 Unit CFP Program – commenced after 2003 2
SMSF Association’s SMSF Specialist Adviser program (9 topic areas) 1
Association of Financial Adviser’s (AFA) Fellow Chartered Financial Practitioner (FchP) – commenced in or after 2013 2
AFA’s Chartered Life Practitioner (ChLP) – commenced in or after 2013 2
Chartered Accountants Australia and New Zealand’s (CAANZ) Chartered Accountant Program commenced in or after 1972 1
Certified Practicing Accountants’ (CPA) Australia, CPA Program commenced in or after 1989 1
CPA Australia’s CPA program that includes at least one of the following Financial Planning electives:
  • Personal Financial Planning and Superannuation
  • Financial Planning Fundamentals
  • Superannuation and Retirement
  • Investment Strategies
  • Risk Advice and Insurance
  • Financial Risk Management.
2

  • a bachelor’s degree, graduate diploma or master’s degree that is not considered by FASEA to be relevant (that is there are less than eight courses in the fields of study listed under ‘Relevant Degree’ above) in addition to:
    • an Advanced Diploma of Financial Services/Planning
    • study towards a FASEA Approved Professional Designation for which FASEA has awarded 2 credits; and
    • between four and seven courses in one or more of the fields of study listed under ‘Relevant Degree’ above in any combination.

Advisers required to complete full Graduate Diploma

The eight-subject Graduate Diploma will need to be completed by an Existing Adviser with:

  • no formal degree qualification
  • no Advanced Diploma of Financial Services/Planning, and
  • no FASEA Approved Professional Designation.

Advisers required to complete between one and eight courses

Many Advisers will fall somewhere in between these two extremes and will be required to complete between one and eight courses before 1 January 2024.

Education Pathways Tool and Feedback Service

FASEA has launched an Education Pathways Tool to help Advisers and Licensees apply the education standard and their future study requirements. In addition, FASEA has opened its Australian Qualification Feedback Service through which advisers can apply to FASEA (for a fee of either $120 or $250) to obtain feedback on their education pathway in situations where there is some uncertainty.

Foreign qualifications

FASEA has released a Policy Statement on how individuals who have obtained their qualifications outside Australia will be assessed to determine whether they meet the education standard.9

Advisers with foreign qualifications will need to apply to FASEA for approval of their qualification. Prior to applying to FASEA, the qualification will need to be assessed by a Department of Education and Training (DET) approved body. This assessment compares an overseas qualification to an Australian qualification, using the Australian Qualifications Framework.

For Existing Advisers with foreign qualifications, a DET approved degree will be assessed by FASEA as either relevant or non-relevant (similar to Existing Advisers with Australian qualifications). This, together with any additional qualifications or FASEA Approved Professional Designations the Adviser holds, will determine the amount of additional study required.

Implications if education not completed in time

An Existing Adviser who does not complete the required education before 1 January 2024 will cease to be authorised as an Adviser from that date. In order to become authorised again, the requirements for New Entrants will need to be met, including the completion of a Professional Year.

Exam

Existing Advisers have until 1 January 2021 to pass the Exam. The first sittings of the exam were held in June 2019. Further sittings will be held in September and December 2019, then every two months from February 2020.

Knowledge and skills assessed

The Exam covers three areas of knowledge and skills:

  • Financial advice regulatory and legal obligations
  • Applied ethical and professional reasoning and communication, and
  • Financial advice construction.

Format

The Exam consists of at least 70 questions, including a minimum of 64 selected response (multiple choice) and six written response (case study style) questions.

The duration is 3.5 hours, including 15 minutes of reading time, and is open book for selected statutory materials.

Candidates with special needs will be able to request support for appropriate assistance to allow them to sit the Exam.

Registration

Advisers will need to register in advance to sit the Exam. The cost of the Exam is $594. This cost will apply each time it is attempted.

Exam locations and scheduling

The Exam will be delivered in Sydney, Canberra, Melbourne, Brisbane, Townsville, Adelaide, Darwin, Perth and Hobart as well as a number of regional centres. A digital delivery option will be made available from 2020 to accommodate candidates who live in remote locations or who are unable to travel.10

The timetable of Exam dates is published on FASEA’s website, along with registration procedures.

Special consideration will be available where there are exceptional circumstances beyond the control of the candidate. This will enable the Exam to be sat later at no additional fee.

Results

An Adviser will need to pass the Exam to a credit level. Candidates will be notified only whether they have passed or failed an Exam. Results are expected to be issued between 6 and 8 weeks after sitting the Exam.

For a fee, candidates will be able to apply for a one-time review of the marking of the written response questions in the event they fail the Exam.

Resits after failed attempts

There is no explicit limit on the number of times the Exam can be attempted. However, a candidate who fails the Exam will be unable to register to sit the Exam again until three months after the failed attempt.

Preparation - learning and study materials

FASEA has published preparation materials, including an Exam Preparation Guide, Exam Candidate Video and Practice Questions. It does not intend to provide Exam preparation courses.

Implications if Exam not passed in time

An Existing Adviser who does not pass the Exam before 1 January 2021 will cease to be authorised as an Adviser from that date. In order to become authorised again, the requirements for New Entrants will need to be met, including the completion of a Professional Year.

Code of Ethics

The legislative instrument for the Code of Ethics was registered on 11 February 2019.

The Code will apply to all Advisers (both new and existing) from 1 January 2020.

The Code is written in a way that addresses the Advisers to whom it will apply (by referring to them as ‘you’ etc).

The Code is underpinned by The Values.


The Values
You must always act in a way that demonstrates, realises and promotes the following values:
(a) trustworthiness;
(b) competence;
(c) honesty;
(d) fairness;
(e) diligence.
These values are paramount. All the other provisions of this Code must be read and applied in a way that promotes the values.

The Code consists of 12 standards covering ethical behaviour, client care, quality process and professional commitment.

The standards comprising the Code of Ethics

We have listed the 12 standards of the Code below and summarised key points of FASEA guidance on the practical application from the Explanatory Statement where available. FASEA has stated that it will provide additional guidance on the standards in a forthcoming guidance document.

Ethical behaviour

Standard 1:

You must act in accordance with all applicable laws, including this Code, and not try to avoid or circumvent their intent.

Standard 2:

You must act with integrity and in the best interests of each of your clients.


FASEA guidance – summary of Explanatory Statement
Acting with integrity requires: “openness, honesty and frankness in all dealings with clients. These qualities underpin the trust that clients should have in you as a professional. It also requires you to keep your promises (explicit and implied) and honour the commitments you or your principal make to your clients.”
You act in a client’s best interests if the advice you give, the products and services you recommend—are appropriate to meet the client’s objectives, financial situation and needs, taking into account the client’s broader, long-term interests and likely future circumstances. The test is will your advice and recommendations improve the client’s financial well-being?
The ethical duty in Standard 2 to act with integrity is a comprehensive ethical obligation The Adviser is in a professional relationship with the client and has a duty to look more widely at what the client’s interests are.
This means that you will need to ascertain —and, if necessary, help the client to ascertain—the client’s objectives, financial situation, needs, interests (including long-term interests), current circumstances and likely future circumstances are. It is important to note that, in order to comply with this ethical duty, it will not be enough for you to limit your inquiries to the information provided by the client; you will need to inquire more widely into the client’s circumstances.
You are not relieved of the ethical duty because the client does not provide enough information, even when asked.
The ethical duty in this standard is not equivalent to the best interests duty of the Corporations Act. The Corporations Act duty provides steps that an Adviser may take and, if those steps are taken, the Adviser will have satisfied the legal requirement. This Code does not have any comparable provisions. So, even if you complete the steps, you may still not have complied with the ethical duty under the Code to act in the client’s best interests.
Other aspects of the duty to act in the client’s best interest include:
  • you must keep confidential all information about the client that you receive or obtain in connection with you (or your principal acting) for the client. You must not use or disclose this information for any purpose other than advising the client except where the client has authorised you or the law requires you to disclose
  • you must treat all clients in a respectful and professional way, and
  • you must treat all clients fairly, as between themselves. You should provide professional services to all clients, managing your business so that each client has a fair share of your attention, skills and time.
You should take into account your client’s express wishes but these do not override your duty to give advice that is in the client’s best interests.

Standard 3:

You must not advise, refer or act in any other manner where you have a conflict of interest or duty.


FASEA guidance – summary of Explanatory Statement
The primary ethical duty in this Standard is that, if you have a conflict of interest or duty, you must disclose the conflict to the client and you must not act. If the client wishes, you may refer the client to another Adviser if neither you nor your principal will receive any benefits from the referral.
You will not breach Standard 3 merely because you recommend financial products offered by your employer or principal. However, you will breach Standard 3 if a variable component of your remuneration depends on the amount or volume you recommend of those products, because your interests will or may conflict with your duty to act in the client’s best interests.
Cases:
  • Harry recommends that his client Fred acquire a particular financial product. Harry’s remuneration includes a bonus depending on the volume or value of that financial product that is sold. Harry’s potential entitlement to the bonus creates a conflict of interest or duty, as it would reasonably appear to influence his advice to Fred.
  • Sally has 2 long-term clients, Bill and Emily, a married couple. They tell Sally that they are divorcing. Because of the divorce, their interests will no longer be the same. If she were to continue to act for both of them, Sally’s duty to Bill would conflict with her duty to Emily.
  • George is partner in a multi-partner advisory practice, where the partners have expertise in different areas. George does not have expertise in self-managed superannuation funds but Elaine, another partner, does. Newman is a new client of George’s. George realises that Newman needs advice in relation to a self-managed superannuation fund. George refers Newman to Elaine, who competently advises him. Although both George and Elaine will benefit (through the partnership) from keeping Newman as a client, George does not have a conflict of interest and the benefits both George and Elaine get do not flow from the referral but from providing the advice to Newman. In fact, George has acted in Newman’s best interest by enabling him to get competent advice.
Disclosing to the client any advantages you would receive, and obtaining your client’s consent (see, for example, Standard 7), will not relieve you of the duty to comply with this Standard.

Client care

Standard 4:

You may act for a client only with the client’s free, prior and informed consent. If required in the case of an existing client, the consent should be obtained as soon as practicable after this Code commences.


FASEA guidance – summary of Explanatory Statement
This standard requires that you only act for a client with the client’s free, prior and informed consent.
This means that, before you start to act, you must have explained to your client, clearly and simply:
  • what services will be provided
  • the terms on which they will be provided, and
  • the records that will be made of the services, and the privacy and confidentiality arrangements applicable to them.
Existing clients’ consent must be obtained as soon as practicable after the Code commences.
“Informed” consent requires that the client understands and agrees to the arrangements. You will need to be satisfied of this, and have reasonable grounds to be satisfied.

Standard 5:

All advice and financial product recommendations that you give to a client must be in the best interests of the client and appropriate to the client’s individual circumstances.

You must be satisfied that the client understands your advice, and the benefits, costs and risks of the financial products that you recommend, and you must have reasonable grounds to be satisfied.


FASEA guidance – summary of Explanatory Statement
This standard expands on the “best interest of the client” duty in Standard 2 and also ensures that you are satisfied that the client understands your advice and the products and services you recommend.
Standard 2 above addresses when advice and recommendations will be in the “best interest of the client”. This Standard emphasises the need for advice and recommendations to be appropriate to the client’s individual circumstances (which will require you to take into account the client’s broader, long-term interests and the client’s likely future circumstances).
This Standard also emphasises the importance of the client properly understanding the advice and recommendations you give, and their implications. It requires you to be satisfied that the client understands:
  • the advice and recommendations you give
  • the benefits of the recommended products
  • the costs involved in acquiring, holding and disposing of the recommended products; and
  • the risks involved in acquiring, holding and disposing of the products, and how you recommend they be managed.
This means that your advice must be clear and simple.

Standard 6:

You must take into account the broad effects arising from the client acting on your advice and actively consider the client’s broader, long-term interests and likely circumstances.


FASEA guidance – summary of Explanatory Statement
This standard expressly requires you to take into account the broad effects of the client acting on your advice. These effects are not limited to effects on the client. For example, your advice may have implications, not just for the client personally, but also for other family members of the client. These will need to be taken into account, although you will not have a duty to act in the best interest of the family members if they are not clients of you or your principal. You will also need to consider whether your product recommendations should be limited to “ethical” or “responsible” investments.
This Standard expressly requires you to take into account the broader, long-term interests and likely circumstances of your client. For example, any potential need for the client or one of the client’s family members to move into aged care accommodation in the near future would need to be factored into any financial advice you give the client.

Quality process

Standard 7:

The client must give free, prior and informed consent to all benefits you and your principal will receive in connection with acting for the client, including any fees for services that may be charged. If required in the case of an existing client, the consent should be obtained as soon as practicable after this Code commences.

Except where expressly permitted by the Corporations Act 2001, you may not receive any benefits, in connection with acting for a client, that derive from a third party other than your principal.

You must satisfy yourself that any fees and charges that the client must pay to you or your principal, and any benefits that you or your principal receive, in connection with acting for the client are fair and reasonable and represent value for money for the client.


FASEA guidance – summary of Explanatory Statement
This Standard requires the client’s free, prior and informed consent to all relevant remuneration arrangements for you and your principal. To meet this Standard, the client must be given a clear and simple explanation of the fees and charges, and the benefits you or your principal will receive, that are attributable to you or your principal acting for the client. This includes monetary and non-monetary benefits. The explanation can be given by you or someone else.
Existing clients’ consent must be obtained as soon as practicable after the Code commences.
You must also be satisfied that your client understands and agrees to these arrangements, and you must have reasonable grounds to be satisfied.
This Standard prohibits you receiving “third party” benefits for acting for a client (unless the Corporations Act expressly allows). This also applies to an Adviser who is an individual financial services licensee. However, it does not prevent a corporate financial services licensee from deriving third party benefits because one of its authorised representatives provides advice to clients. Corporate financial services licensees are not Advisers subject to the Code.
This standard also requires that all fees and charges payable to you or your principal, and benefits you or your principal receive, for acting for the client are fair and reasonable, and represent value for money for your client. This is an integral part of your duty to deal fairly with your client, and in his or her best interests.
The Code does not in any way remove the need to comply with the conflicted remuneration requirements under the Corporations Act.

Standard 8:

You must ensure that your records of clients, including former clients, are kept in a form that is complete and accurate. 

Standard 9:

All advice you give, and all products you recommend, to a client must be offered in good faith and with competence and be neither misleading nor deceptive.


FASEA guidance – summary of Explanatory Statement

This Standard requires that all financial product advice, and all financial products, offered to a client be offered in good faith. This means that you must act honestly, and in the best interest of the client, in giving the advice and making the recommendations. You will not be acting in good faith if there is something you are aware of, or ought to be aware of, that would lead to the conclusion that your advice is not in the clients’ best interests, taking into account the broad effects arising from the client acting on your advice and the broader, long-term interests and likely circumstances of the client.

This Standard also requires that all financial product advice, and all financial products, be offered “with competence”. Among other things, this requires that all Advisers act efficiently, honestly and fairly. The Corporations Act requires licensees to “do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly”; this Standard ensures that a corresponding ethical duty applies to Advisers.

This Standard reflects the current law requiring that financial product advice given, and financial products recommended, not be misleading or deceptive.


Professional commitment

Standard 10:

You must develop, maintain and apply a high level of relevant knowledge and skills.


FASEA guidance – summary of Explanatory Statement

This Standard imposes, as an ethical duty, a requirement to develop and maintain a high level of relevant knowledge and skills. For example, if you specialise in a particular area, you should not provide advice outside that area unless you have the necessary skills and competencies to do so in a professional way.

Meeting the CPD requirements (part of the education and training standards) will assist with meeting this duty.


Standard 11:

You must cooperate with ASIC and monitoring bodies in any investigation of a breach or potential breach of this Code. 

Standard 12:

Individually and in cooperation with peers, you must uphold and promote the ethical standards of the profession and hold each other accountable for the protection of the public interest.


FASEA guidance – summary of Explanatory Statement

This Standard deals with Advisers’ professional relationships with each other, emphasising that they need to be supportive and aligned to the profession as a whole—being, and being seen to be, a profession that acts ethically and professionally.

One element of this duty affects Advisers who are acting as supervisors those undertaking the Professional Year. This Standard requires that you must provide supervision that is in the best interest of the provisional Adviser, that is, supervision that actively assists him or her in getting the full benefit of the Professional Year.


Enforcement of the Code of Ethics

Advisers who are subject to the Code will need to be covered by a compliance scheme and a monitoring body approved by ASIC. Compliance schemes must set out how the body monitors compliance with the Code, complaints procedures and dispute resolution mechanisms.

Monitoring bodies will have the power to investigate breaches of the Code and impose sanctions. Examples of potential sanctions are a warning, requiring the Adviser to undertake training, requiring additional supervision or a compliance audit, requiring specific corrective action or requiring the Adviser to provide the services again at no or reduced cost. The most serious sanction that can be imposed by a monitoring body is exclusion from coverage of the monitoring body’s compliance scheme. ASIC retains power to investigate any breaches of the Corporations Act in respect of breaches of the Code and can ban a licensee of an Adviser or an Adviser who is a licensee.

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Additional information

1 See ASIC Media Release 18-355MR Financial advisers urged to ensure registration by 31 December 2018, dated 23 November 2018.

2 See Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018, made on 19 December 2018 and FPS004 Continuing Professional Development Policy, January 2019.

3 See FPS004 Continuing Professional Development Policy, January 2019.

4 See FASEA’s CPD Frequency Asked Questions.

5 See FPS001 Education Pathways Policy, April 2019.

6 Approved Degrees are listed in FASEA Approved Degrees and Equivalent Qualifications and Courses to meet the Education Standard.

7 See FASEA Approved Recognition of Prior Learning List, July 2019.

8 See FASEA Approved Recognition of Prior Learning List, July 2019.

9 See FPS005 Foreign Qualifications Policy, April 2019.

10 See FPS006 Examination policy, February 2019. See FPS006 Examination Policy, February 2019.

Important information

Macquarie Investment Management Limited (MIML) ABN 66 002 867 003 AFSL 237 492 is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, and MIML’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIML.

This information is provided for the use of financial services professionals only. In no circumstances is it to be used by a potential investor or client for the purposes of making a decision about a financial product or class of products.

The information provided is not personal advice. It does not take into account the investment objectives, financial situation or needs of any particular investor and should not be relied upon as advice. Investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs. Any examples are illustrations only and any similarities to any readers’ circumstances are purely coincidental.

While the information provided here is given in good faith and is believed to be accurate and reliable as at 1 August 2019, it is provided by MIML for information only. We will not be liable for any losses arising from reliance on this information.

MIML and Macquarie Bank Limited do not give, nor purport to give, any taxation advice. The application of taxation laws to each client depends on that client’s individual circumstances. Accordingly, clients should seek independent professional advice on taxation implications before making any decisions about a financial product or class of products.

Copyright 2019 Macquarie Investment Management Limited.

Any information on this page in relation to mortgages has been prepared by Macquarie Securitisation Limited (MSL) Australian Credit Licence (ACL) 237863 ACN 003 297 336.

Unless stated otherwise, this information has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502.

This information is provided for the use of licensed and accredited brokers and financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products.

Additional information on products and services featured on this page

Macquarie Investment Management Limited (MIML) ABN 66 002 867 003 AFSL 237 492 is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, and MIML's obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIML.

This information is provided for the use of financial services professionals only. In no circumstances is it to be used by a potential investor or client for the purposes of making a decision about a financial product or class of products.

The information provided is not personal advice. It does not take into account the investment objectives, financial situation or needs of any particular investor and should not be relied upon as advice. Investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs. Any examples are illustrations only and any similarities to any readers' circumstances are purely coincidental.

While the information provided here is given in good faith and is believed to be accurate and reliable as at 6 May 2019, it is provided by MIML for information only. We will not be liable for any losses arising from reliance on this information. MIML and Macquarie Bank Limited do not give, nor purport to give, any taxation advice. The application of taxation laws to each client depends on that client's individual circumstances. Accordingly, clients should seek independent professional advice on taxation implications before making any decisions about a financial product or class of products.

Copyright 2019 Macquarie Investment Management Limited.