Key Points
IFSA’s Industry Code of Ethics and Code of Conduct: I strongly support industry self-regulation. IFSA’s industry standards are important to ensure that the financial services industry is — and is seen to be — active in setting standards for the conduct of its members.
I’m now delighted to launch IFSA’s revised Standard. No. 1, setting a Code of ethics and conduct for IFSA’s members.
I understand that this standard, which was introduced in 1999 and revised in 2000 and 2001, was reviewed by IFSA late last year, with input from its members and the St James Ethics Centre.
The standard has been enhanced to better reflect the responsibilities that the financial services industry has to its investors, and to specify more clearly the governance and compliance process. I believe it speaks for the high standards of service that all IFSA members aspire to.
It will complement the existing regulatory structure, and help IFSA member companies to better serve their clients.
Sir Anthony Mason, former Chief Justice of the High Court of Australia, made some interesting observations about professionalism and ethics in an address last month to the superannuation industry.
As Sir Anthony pointed out, in recent years we have seen a decline in the respect accorded to professional people and their opinions. As he put it:
“Clients and patients are now more inclined to question their advisers, to criticise them and to sue them when things go wrong.”
This is because investors have increasingly higher expectations about the products and services they seek out, and because increased competition has presented investors with greater choice than ever before.
Australians expect high standards of service and professionalism from all types of professionals, including lawyers and accountants, as well as financial advisers and others in the financial services industry.
To meet these increasingly high expectations, it is important that industry respond to such expectations by adopting, implementing and continually improving its own standards.
I also think it’s important for the industry to actively promote these standards to their clients and the broader public.
In an environment where the Government is committed to reduce the regulatory burden on business, it is encouraging that industry is committed to self‑regulation. In this way, industry is not only able to set high standards - for the benefit of investors and, ultimately their own businesses - but this approach also avoids the need for Government to introduce further red tape.
For these reasons, I strongly welcome and support IFSA’s approach to leading the way in the financial services industry by firstly introducing such standards, and also committing to ensuring that they remain current.
In his speech, Sir Anthony drew a distinction between “professionalism” and “ethics”. As he pointed out:
“Professionalism now signifies high professional standards of competence. On the other hand, ethics signifies high standards of ethical conduct. The attainment of high standards of professional competence is not enough on its own. It is necessary to pursue high ethical standards as well.”
I couldn’t agree more. So I am pleased to note that IFSA’s revised Standard No. 1 explicitly sets out ethical principles to guide the decision-making and conduct of its members.
I’m also pleased to see that IFSA has developed its own Standards Oversight and Disciplinary Committee to monitor member adherence to the principles set out in the code of ethics.
I have no doubt that the committee will be instrumental in further developing the professionalism and accountability of your members.
Once again, I’m delighted to launch the revised standard. I’m confident that it will help IFSA member companies to provide greater quality assurance to their clients, and raise the bar for your industry.
Thank you.