Code working group chairman Angus Dale-Jones says the group is already anticipating changes to the proposals it put forward – including the wording of its “good advice outcomes” directive.

In its proposals, to form the basis of the new code of conduct for financial advisers, the group said achieving good advice outcomes should be one of the overarching principles of the new rules.

Advisers responded with criticism – saying that consumers would see “good outcomes” as products that performed well, rather than good advice given on them.

Dale-Jones said the group was aware that “outcome” was a word that could easily confuse people and it would probably try to find a different term to replace it as the development of the code continued.

There would also be likely changes around the competence requirements, he said.

“There are lots of different views of how we should draw the dividing line between more and less complex advice situations.”

Some submitters had indicated they thought the proposal for advice to be split into product advice and planning services was correct while others vehemently opposed it.

But Dale-Jones said it was too early to predict how the proposals might change – and how other suggestions might be amended – until the group had worked through all the submissions and feedback it received and heard.

Dale-Jones said he was aware that, to be fair to the industry, the code would soon have to get to more precise wording of its proposals from its previous high-level consultation approach.

It was waiting for feedback from the select committee considering the Financial Services Legislation Amendment Bill. That committee has been given more time to report – it now has until the end of July.

Dale-Jones said the Australian Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was important context to what the working group was doing because the code’s foundation was built on trust between advisers and consumers.

The commission was tackling issues that went to the heart of trust in financial services, he said.

But in terms of the working group’s approach, the priority was to hear back from select committee to see what direction the Financial Services Legislation Amendment Bill would take.

“At that stage once we’ve heard from them we can go on to look at the broader context and Australia is part of that context.”

An MBIE spokeswoman said the government still hoped to pass the bill this year.

"But regardless of when it gets through parliament, we will make sure there’s enough time for the advice industry to get ready before the regime comes into force..

 

Good Returns,

by Susan Edmunds