In 2017, the Federal Government passed legislation aimed at raising the professional, ethical and educational standards of financial advisers. Partner Selina Nutley says the most significant reforms require financial advisers to comply with a single uniform code of ethics and to have in place a compliance scheme to monitor their compliance with that code.
All financial advisers must be covered by a compliance scheme from 1 January 2020. Compliance with the code will not be monitored by ASIC, but rather by a "monitoring body" which must be independent, impartial and comprised of members with appropriate expertise.
While the code of ethics is presently being developed by the Financial Adviser Standards and Ethics Authority, financial advisers and licensees are responsible for preparing their compliance scheme. ASIC has recently released Regulatory Guide 269 Approval and oversight of compliance schemes for financial advisers which sets out the criteria it will use to determine whether it will approve a proposed compliance scheme. ASIC's approach is underpinned by the key principles of transparency, consistency and fairness. ASIC will look for the following elements in a compliance scheme:
Our Funds Management lawyers are up to date with the details of these changes and can help with any queries and also developing your compliance scheme.