The Financial Adviser Standards and Ethics Authority (FASEA) is seeking feedback on its proposed amendments to Standard 3 of its Code of Ethics, in response to long-running concerns about its feasibility in practice.

Advisers and planners have previously voiced their misgivings about the standard, which states “You must not advise, refer or act in any other manner where you have a conflict of interest or duty”.

But FASEA went ahead, launching the ethics code in January last year and also released guidance on how it expects Standard 3 to be interpreted and applied.

“The Code of Ethics provides an ethical framework of values and standards to assist advisers in exercising their professional judgement in the best interests of their clients,” CEO Stephen Glenfield said.

“FASEA understands that some stakeholders have raised concerns regarding the wording of Standard 3 and welcomes stakeholder feedback on proposed options to align the wording of the Standard with the intent of the standard.”

In the consultation paper, FASEA raised three suggestions for consideration.

The first option incorporates FASEA’s intent into the standard so that it will be worded as “You must only advise, refer or act where you do not have a conflict of interest or duty, being that which could reasonably be expected to induce you to act other than in the client’s best interest”.

For the second option, the standard will read as “You must not receive any benefit (whether monetary or non-monetary), nor enter into any relationship, that could reasonably be expected to influence the advice you give or the service you provide to your client”.

The third option is to maintain Standard 3 in its current wording.

“FASEA is committed to preserving the intent of the current Code; namely, that financial advice only be offered by advisers who are free from conflict,” the consultation paper said.

“FASEA is also open to making changes to the means by which this clear intent is realised through the provisions of its Code.”

Closing date for submissions is December 1.

Click here for the consultation paper.