Customer outcomes and insurer and banking conduct have been identified as key areas of focus for the regulators this year, and experts say it is important for advisers to review their compliance process on an ongoing basis - particularly when it comes to meeting Code standards.
DLA Piper partner Tracey Cross recently spoke with FSC members, and said that when it comes to legislation, meeting Code of Conduct standards is “non-negotiable”. She recommended regularly reviewing how a business is functioning, and making sure that all of its systems are effective in meeting compliance objectives.
“We’re four months into the new regime now, and I think it’s always important to reflect quite regularly on the ways in which we’re looking to comply with the new regime,” Cross said.
“The Code standards can’t be read in isolation from the legislation, and one of the requirements is to comply with Code standards - so these are non-negotiables. There’s always an opportunity to reflect on how you’re running your business, and how you’re interacting with your clients.”
“The FMA just released their Annual Corporate Plan, which just further emphasises the focus on customers and continues to highlight the importance of these standards,” she continued.
“The first two standards really underpin all expectations, and those are treating clients fairly, and acting with integrity. That’s about how you interact with them, the strength of the relationship that you have with them, and being accountable for client outcomes as an adviser.”
Cross said the Code standards are a vital part of every client relationship, and should be implemented throughout the “advice journey.” She also noted that the Code also places a lot of importance on data protection, and given the type of information that advisers deal with, it is vital to get this aspect of the business right.
“All clients are different, so it really is about strengthening that relationship on an ongoing basis, making sure that you’re aware of the changes they’ve got going on throughout their lives, disclosing any conflicts of interest, etc. so that you can lead your client through the advice journey,” Cross said.
“It’s really important that we comply with these standards, and that they’re part of our everyday relationship with the client.”
“The fifth standard is around client information. Through your relationships and discussions with your clients, you’re of course amassing a lot of information, so the duty to protect that is a very basic duty within Code standards that we need to be cognisant of. Of course, that entails general privacy standards,” she said.
“I’m sure everyone has read the Code by now, but I encourage you to get it out and read through it. It’s very easy to understand, but there will be nuances all along the way.”
