Who’s going to fix the FASEA Code of Ethics?

Alex Burke,  Senior Writer,  No More Practice Education

FASEA's results for the March round of adviser exams have been released, showing a declining pass rate (74% first-time candidates passed compared to the average of 83%) and an increased number of exam participants (2,234 versus the average of 1,399).

Commenting on the results, FASEA CEO Stephen Glenfield said: "FASEA congratulates successful candidates on completing an important component of their education requirements under the Corporations Act. Over 15,200 advisers have sat the exam with 9 in 10 demonstrating they have the skills to apply their knowledge of advice construction, ethics and legal requirements to the practical scenarios tested in the exam."

Glenfield added: "In recognition of their achievement, passing candidates who give consent will have their names added to the successful candidates list on the FASEA website."

As per standard FASEA practice, unsuccessful candidates will receive individual feedback on key areas of underperformance.   

Now: would you like to guess what one of those areas of underperformance was in the March exams? It's something we've covered fairly extensively - here, for example, as well as here, here, here, here, here, here, here and here. That’s right: it’s the Code of Ethics and the practical applications thereof.

Given how familiar this story has become, one can assume that either there is a shared and specific lack of understanding of the Code of Ethics amongst unsuccessful candidates or that there are fundamental issues with the Code itself. Considering the volume of guidance FASEA has issued concerning the Code over the past few years, it would seem the latter option is more likely. 

This isn’t an original observation: in the articles linked above, the Code has been described by some advisers, association leaders and politicians as "unworkable", "built wrong from the ground up", a "huge challenge" and an impediment to the provision of scaled or limited advice. 

Can it be fixed? Are there plans to change it? As per FASEA’s most recent corporate plan, the Code is due for updated guidance early next year and a review in 2024.

Of course, FASEA won’t exist by early next year; standard-setting functions will be under Treasury’s control. And Treasury has indicated that despite being aware of advisers’ concerns, there are no current plans to amend or replace the Code of Ethics. Were this to occur, it would only be after “further [engagement] with industry and understanding any concerns." 

Still, there is at least acknowledgement in Government that further change may be required regarding the post-FASEA advice agenda. Speaking at an FSC event, Senator Jane Hume said that FASEA only focused on one piece of the advice "puzzle," adding that "[it] didn’t focus on keeping the costs of doing business low or making advice readily accessible to consumers."

Perhaps the Government’s recently-merged Quality of Advice review will focus on just that. If it does, it would be a prime opportunity to consider what should be done about the adviser code.


The opinions expressed in this content are those of the author shown, and do not necessarily represent those of No More Practice Education Pty Ltd or its related entities. All content is intended for a professional financial adviser audience only and does not constitute financial advice. To view our full terms and conditions, click here

Want more of the latest in opinions, expert insights and training?

Subscribe to our free newsletter now

/ Related content

Advisers weigh in on why Australians are shunning advice

According to a new piece of research from the FPA, many Australians stil....

Industry associations unite against the CSLR advice burden 

A group of industry and consumer associations have jointly condemned the Go....

Why the cost of the FASEA exam has nearly doubled

Following on from last week's discussion about the Better Advice Bill am....

Ben Dover

12/05/21

FARSEA just another layer of moronic bureaucratic BS costly REGS that has blindly been put in place with corrupted input from ASIC, Paid for comment academics & Choice magazine (given after reviewing white goods for years they must be Advice experts). Another layer of costly BS Regs that has to be added to the list to be dismantled. ASIC, Treasury and Pollies have zero idea how to untie the gross Gordian Knot they have tied Advisers in :-/

John Stankevicius

12/05/21

Accountants to do this is absolute waste of breath. Sat it twice and flunked it twice. 6 Months of after hours and weekends pissed up against a wall. Meal while my business is falling behind as Saturdays are spent reading this shite through transparent eyelids. My personal skill level since the end of the accountants carve has gone backwards big time due the 40 CPD wasted on Fin Planning and FASEA. What my clients needs is totally different to this garbage. Further the public do not want to get shunted from one person to another for super advise. This has just increased the fees of advise. This has also reduced competition - skewed to financial planners who deal with SOA and remuneration on a daily basis. Share brokers and accountants have the highest failure rates over 50%. Thanks for taking me backwards skill wise, business wise, stopping me from dedicating time to set up new services and the $5k to provide super advise. People who set this are useless.

Dont Waste My Time

12/05/21

The unfortunate part of all this absolute waste of time and crap - they have not even set up a proper understanding of what the Code Of Ethics are - they are all over the shop No Clear understanding of what is needed what to read, and for the idiot at FASE who said and i quote reading the Corporations Act is a good read !!!! Now there is a public servant who cant sit on his pervebial get paid a S**t load and has NEVER in his life sat in front of a client ?? These are the people telling US about Ethics .... I'm surprised they were able to spell the word .

Leave a comment /

Related content /

13 October, 2021

Alex Burke,Senior Writer,No More Practice Education

Advisers weigh in on why Australians are shunning advice

According to a new piece of research from the FPA, many Australians still don't see the value of advice, with nearly half (41%) of participants exp....

Read now

13 October, 2021

Alex Burke,Senior Writer,No More Practice Education

Industry associations unite against the CSLR advice burden 

A group of industry and consumer associations have jointly condemned the Government's proposed compensation scheme of last resort (CSLR), arguing it d....

Read now

06 October, 2021

Alex Burke,Senior Writer,No More Practice Education

Why the cost of the FASEA exam has nearly doubled

Following on from last week's discussion about the Better Advice Bill amendments, we look into why the price of admission to FASEA certification is....

Read now