FPC002B Ethics and Professionalism in Financial Advice

Emotional Intelligence in Financial Advisers

• 89% of financial advisers in the US have engaged in non-financial counseling and coaching, with 25% of their job devoted to non-financial issues.
• Interpersonal skills and emotional intelligence are key differentiators for leading financial advisers in the eyes of clients.
• Clients rate capabilities such as empathy, listening to and understanding client needs as highly important (82%).

Regulatory Guidance

• The professional standards reforms apply to financial advisers who provide personal advice on relevant financial products to retail clients from 1 January 2019.
• The training standards in RG 146 no longer apply to relevant providers.
• The objects in Chapter 7 of the Corporations Law aim to ensure informed decision making, innovation, professionalism, fairness, and transparency in financial markets.

Code of Ethics

• The Code of Ethics imposes a positive duty to act in a client's best interests, which is not entirely the same as the duty under the Corporations Act.
• Financial advisers must keep confidential all information about the client, and not use or disclose this information for any purpose other than advising the client unless the client has specifically agreed or the law requires.
• Advisers must treat all clients fairly, respectfully, and professionally, and provide professional services to all clients, managing their business to ensure each client has a fair share of their attention, skills, and time.

Confidentiality and Data Protection

• The Financial Advice Association Australia (FAAA) Professional Code mandates that all members protect the confidentiality and integrity of all business and personal information relating to their client's affairs.
• Confidential information can only be disclosed to certain persons or otherwise only with the client's informed and explicit consent.
• Financial advisers must refer to their legal obligations under the Privacy Act 1988 (Cth) and the Australian Privacy Principles to maintain client confidentiality.

Test your understanding of regulatory guidance in financial advice, including licensing and example statements. Learn about the scope of the licensing regime and more.