Dear clients,

The Banking Royal Commission into financial advice resulted in the creation of FASEA, the Financial Adviser Standards and Ethics authority.

The introduction and mandatory compliance of their code of ethics starts 1 January 2020: https://www.fasea.gov.au/code-of-ethics/
The intention of all these changes is to create a proper profession that the public can trust by introducing the code and ethical concepts like:

 

 

  • The best interests duty.
  • Appropriate advice based on relevant circumstances.
  • Client in a better position after advice.
  • Conflicts of interest not allowed.
  • Disinterested observers reasonable observations.

 

The creation of a monitoring body to oversee the above and various mechanisms to ensure compliance with various regulatory bodies and legislations:

 

  • Corporations law
  • Australian privacy principles
  • Tax practitioners board
  • AUSTRAC

 

Whilst all this was happening before it will be more obvious to you, the client now.
I wrote previously that “After every period of under regulation there is an eventual period of over regulation”.
I can see that many advisers will struggle with the changes however I am proud to say for VJC WM it is business as usual:

 

  • Our Accounting roots have meant we always applied integrity, honesty, ethics and professionalism.
  • We base our fees on time spent and expertise applied.
  • Our qualifications are the highest possible, I have only had to complete the mandatory 2 re-qualifying exams, many advisers have extra to do.

 

Whilst our service and professionalism may not be in need of change as per our Blog in June 2019 “The new world – Post Royal Commission update”,  all financial advice businesses costs have risen substantially i.e. our license, insurance and costs to comply etc. It is my considered opinion that the quality of service will increase as well with compliance with above changes, part of this will come from advisers needing to insist on more client participation. These sentiments seem to be reflected in the following Australian Financial Review article:
https://www.afr.com/companies/banking-royal-commission-financial-advisers-worry-rising-costs-will-price-out-customers-20190205-h1avka

 

Despite the changes and inconvenience I feel clients and advisers will be better off.
We are reaching out to clients over the next month to discuss the changes however please call if you would like to discuss beforehand.

Talk soon
Adrian Chaudhary