FASEA Code of Ethics and Standards for Financial Advisers

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

Trustworthiness, competence, honesty, fairness, diligence

What must an adviser do according to Standard 1?

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

What is required of an adviser under Standard 2?

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

What does Standard 3 prohibit?

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

What must an adviser obtain according to Standard 4?

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

What is the focus of advice according to Standard 5?

All advice must be in the client's best interests and appropriate to their individual circumstances.

What does Standard 6 require advisers to consider?

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

What must an adviser ensure according to Standard 7?

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

What does Standard 8 state about fees?

Fees and costs must be fair, reasonable, and clearly agreed to by the client.

What is required under Standard 9?

Maintain a high level of relevant knowledge and skills.

What does Standard 10 emphasize?

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

What does Standard 11 require from advisers?

Comply with the ethical requirements of their professional body.

What is the focus of Standard 12?

Promote and uphold ethical behaviour across the financial advice profession.

What breach occurs when an adviser recommends a product for higher commission?

It breaches Standard 2 and Standard 3 due to failure to act in the client's best interests and unmanaged conflict of interest.

What breach occurs when an adviser exploits a loophole?

It breaches Standard 1 because advisers must not avoid or circumvent the intent of the law.

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 breach occurs if an adviser provides advice outside their expertise?

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

What does disclosure alone fail to manage?

It fails to manage a conflict of interest (breaching Standard 3).

What happens if fees are charged without client awareness?

It breaches Standard 8 as fees must be fair, reasonable, and clearly agreed to.

What breach occurs if an adviser ignores long-term impacts?

It breaches Standard 6 by failing to consider the client's long-term interests.

What must an adviser do if a client does not understand complex jargon?

It breaches Standard 7 due to failure to ensure client understanding.

What happens if an adviser behaves unprofessionally on social media?

It breaches Standard 10 and Standard 12 as it undermines the profession's reputation.

What is the Code's stance on legal compliance versus ethical behaviour?

The Code requires ethical behaviour beyond legal compliance.

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

Refuse to act — client consent does not override best interests (Standard 5).

Is client consent enough to justify conflicted advice?

No — consent does not remove a conflict of interest (Standard 3).

Which standard is frequently tested in ethics exams?

Standard 3 — conflicts of interest.

Which standard relates to professionalism and reputation?

Standard 10.

What must an adviser do if a client wants quick advice without details?

Ensure the client understands the advice before proceeding (Standard 7).

What is the implication of an adviser lacking real experience?

It may breach Standard 9 — maintaining competence.

What is the relevance of fees that are common but provide limited service?

It may breach Standard 8 — fees must be fair and reasonable.

What should an adviser do if they follow licensee instructions that disadvantage the client?

Act in the client's best interests over the licensee's interests (Standard 2).

What must an adviser do if a client insists on inappropriate advice after risks are explained?

Refuse to act — informed consent does not override appropriateness (Standard 5).

What is the assessment if an adviser discloses a conflict but proceeds with advice?

Disclosure alone is insufficient — the adviser must avoid the conflict (Standard 3).

What is breached if advice ignores long-term retirement goals?

Standard 6 — failure to consider long-term interests.

What is breached if an adviser damages trust in the profession?

Standard 10 — professionalism and reputation.

What is the conclusion if a client signs consent documents without understanding fees?

There is no informed consent — breach of Standards 4 and 8.

What issue arises if an adviser continues fees without checking authority?

Lack of free, prior and informed consent (Standard 4).

What does it mean if an adviser meets legal requirements but behaves unethically?

The Code requires ethical behaviour beyond legal compliance.