Updated: 30 October 2023

The Code of Ethics for financial advisers is not all about catching out bad players, or about trading profit for “doing good”, says Australian Financial Complaints Authority (AFCA) Deputy Chief Ombudsman June Smith.

“We are in the people business, human relationships, so how this profession and each adviser is going to engage and relate to people when dealing with their issues is critical,” Dr Smith says as a guest of Professional Planner’s Ethics for Advisers podcast.  

While it’s true the new professional standards that are being implemented are designed to lift and clarify standards, “if that’s our sole frame of reference we might be missing a real opportunity”, she says. That opportunity is to build a community of practice to help financial advisers identify and resolve the complex ethical dilemmas they face in delivering financial advice every day.

Rather than viewing the changes as involving a trade-off between “doing good” and profit, they can be about “leveraging a client value proposition anchored to client-first service, [and driving] profit that way."

Three sets of values drive planners in their decision making – their own moral values and compass, the ethical values of the profession that provide the guard rails for conduct and client engagement and the values and culture of the organisation in which they work, Dr Smith says.

The complaints AFCA sees often connect back to issues to do with culture, including one-size-fits-all business models. 

“If you put a good person in a good corporate culture you’ll often get good decision making and good outcomes,’’ she says. But even people with good moral compasses can do the wrong thing if the corporate culture isn’t right and ethical leadership is absent. “These factors will influence conduct, behaviour and attitudes within a business.”

Financial planners play a positive and critical role in delivering much-needed services to Australians, she says. A Code of Ethics that all financial advisers subscribe to can only lift the industry’s reputation.

You can listen to the full podcast here.
See Professional Planner’s story here.


Published: 27 September 2021


Media enquiries media@afca.org.au

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The Australian Financial Complaints Authority (AFCA) is a non-government ombudsman service providing free, fair and independent help with financial disputes. It is a one-stop-shop for consumers and small businesses who have a dispute with their financial firm, over things such as banking, credit, insurance, advice, investments or superannuation. Where an agreement cannot be reached between parties, AFCA can issue decisions that are binding on financial firms.

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