FASEA’s Code of Ethics commences 1 January 2020 and is underpinned by five (5) values – this is a guide to Diligence.
Diligence is action-oriented, so clients want to know if they can count on you to not only act in a manner that applies your knowledge to the development and implementation of advice but also to deliver your services in a timely, efficient and cost-effective way.
Our definition of diligence is that it represents the efficient delivery of a service in a timely and cost-effective manner using relevant knowledge, skills, determination and care.
From FASEA’s perspective:
“Acting to demonstrate, realise and promote the value of diligence requires that you perform all professional engagements with due care and skill. It requires you to manage your time and resources to deliver professional services in a timely, efficient and cost-effective way to each client.
It is about the way you go about your professional work, the commitment you bring, and the values you espouse and demonstrate in all your professional interactions with your clients and with others.
It requires that you exercise due care and skill in the way you:
- engage each client;
- understand each client;
- diagnose each client’s needs and issues;
- scope or limit the professional services you will provide each client;
- develop strategy solutions and recommendations for each client;
- develop product and service solutions and recommendations for each client;
- ensure the strategy and product solutions you provide to each client are fit for purpose and are intended to improve your client’s financial well-being;
- make required disclosures to each client in your Financial Services Guide, Statement of Advice and Record of Advice and in providing Product Disclosure Statements and Investment Memoranda;
- implement agreed recommendations;
- engage each client to deliver on-going services (including reviews) if appropriate;
- undertake record-keeping in respect of the professional services you provide each client; and
- meet your obligations in the law in respect of the advice you provide to each client including:
- best interests’ duty;
- appropriateness of advice;
- prioritisation of client’s interests;
- additional requirements for product replacement recommendations; and
- Australian Taxation laws.
It requires that you keep abreast of developments and options for clients.”
This suggests there is a linkage to the value of competence, requiring knowledge, skills, and experience. Based on our research and experience, the requirement to deliver services in a timely, efficient and cost-effective way indicates twin requirements to minimise client effort and maximise value for money.
SOME PRACTICAL SUGGESTIONS
Start a checklist
Here are some suggestions about what questions to include on your checklist.
- Did I take into account my client’s needs, priorities, circumstances, and preferences?
- Did I take into account my client’s broader, long-term interests and likely circumstances?
- Were my advice and recommendations fit for purpose and intended to improve my client’s financial well-being?
- Was I easy to work with?
- Were my fees and charges fair and reasonable and did they represent value for money?
Here are a few practical actions you could consider.
- Plan well and pace yourself to ensure the advice you provide clients is delivered according to promised timelines and using the most efficient processes possible, making it easy for clients to do business with you.
- Take full responsibility for the on-time delivery of relevant advice to a client, even though some aspects have been delegated to others on the team.
- Ensure that advice workflows and processes are designed in a way that eliminates the possibility of inefficiencies and delays.
We hope this article about the values prescribed by the FASEA Code of Ethics has been useful.
Disclaimer This article was issued in December 2019 and is point in time content based on the Financial Planners and Advisers Code of Ethics 2019 Legislative Determination, the accompanying Explanatory Statement and Guidance, together with proprietary research. It does not constitute legal advice. We encourgae you to seek your own professional advice on how the FASEA Code of Ethics may apply to you. Suggestions in this article are not exhaustive and are not intended to be binding on the author or related entities. Further guidance may be released by FASEA and may change the suggestions within this point in time article.