FASEA Code of Ethics: Standards and Ethical Scenarios for Financial Advisers

What must an adviser do in accordance with applicable laws?

Act in accordance with all applicable laws and not try to avoid or circumvent the intent of the law.

What is the adviser required to prioritize?

Act with integrity and in the best interests of each client.

What should an adviser avoid in their recommendations?

Advising, referring, or acting where there is a conflict of interest or duty that cannot be avoided.

What is required for an adviser to act for a client?

The client's free, prior, and informed consent.

What must all advice be based on?

The client's best interests and appropriate to their individual circumstances.

What should an adviser consider regarding the client's future?

The client's broader, long-term interests and likely future circumstances.

What must an adviser ensure regarding client understanding?

The client understands the advice and the consequences of acting on it.

What must fees and costs be?

Fair, reasonable, and clearly agreed to by the client.

What level of knowledge must an adviser maintain?

A high level of relevant knowledge and skills.

What is expected of an adviser in terms of professionalism?

Act professionally and uphold the reputation of the financial advice profession.

What ethical requirements must an adviser comply with?

The ethical requirements of their professional body.

What must an adviser promote across the financial advice profession?

Ethical behaviour.

What is a breach of Standard 2 and Standard 3?

Recommending a product that pays higher commission despite a cheaper, suitable alternative.

What does breaching Standard 1 involve?

Following the letter of the law but structuring advice to exploit a loophole.

What happens if a client signs authority without understanding the advice?

It breaches Standard 4 and Standard 7 due to lack of informed consent and inadequate explanation.

What is the consequence of providing advice outside an adviser's area of expertise?

It breaches Standard 9 (competence) and may breach Standard 5 if advice is inappropriate.

What is insufficient for managing a conflict of interest?

Disclosure alone is insufficient; conflicts must be avoided, not just disclosed (Standard 3).

What is a breach of Standard 8?

Charging ongoing fees without client awareness or agreement.

What must an adviser consider regarding short-term benefits?

The adviser must consider the client's long-term interests (breaches Standard 6 if ignored).

What is a breach of Standard 7?

Using complex jargon knowing the client does not understand it.

What can damage trust in advisers?

Behaving unprofessionally on social media (breaches Standard 10 and Standard 12).

What is required for ethical behaviour according to the Code?

Meeting both legal and ethical obligations, not just compliance.

Which standard is most tested in ethics exams?

Standard 3 — Conflicts of interest.

What is the overarching test of ethical behaviour?

Whether the adviser promotes the values of trustworthiness, competence, honesty, fairness, and diligence.

What must an adviser do if a client insists on inappropriate advice?

Decline to act (Standard 5 — appropriateness).

Can client consent justify conflicted advice?

No — consent does not remove the conflict (Standard 3).

Which standard links closely to professionalism and reputation?

Standard 10.

What must an adviser do if a client signs documents quickly without understanding?

Ensure understanding; it is still a breach if understanding is not ensured (Standard 7).

What can lead to breaching Standard 8?

Fees being industry standard but the service being minimal.

What happens if advice is intentionally complex to avoid client questioning?

It breaches Standard 7 and likely the values of honesty and fairness.

What is a breach if an adviser continues charging fees without checking consent?

Breaches Standard 4 and Standard 8.

What is the adviser's accountability under the Code?

You are individually accountable, not just following senior adviser's instructions.

What must an adviser do if there is a perceived conflict?

Avoid the situation; perceived conflicts matter (Standard 3).

What must an adviser consider even when providing scaled advice?

Obvious risks outside the scope do not remove best interest obligations (Standard 5).

What are the five values underpinning the FASEA Code of Ethics?

Trustworthiness, competence, honesty, fairness, diligence.