Consultation has finished on the draft version of the new code of conduct that will apply to all advisers under the new regime.

While the current code for AFAs is principles-based, the draft version of the new code went even further – for example, suggesting that CPD be undertaken, not how many hours should be completed.

Adviser Alistair Bean said the code was too subjective.

“With an overall generalised recommendation of leaving it up to advisers and businesses to make their own way through the code [the draft requirements] meant there were no specific measurements or benchmarks to achieve and exceed, and then the possibility of likely being held accountable for those ‘unset requirements’, was very subjective,” he said.

“FMA gives a template guideline for things like ABS and disclosure docs, so why not everything else?  This may imply management by abdication and then accountability by implied ignorance.”

David Greenslade, of Strategi, agreed there were concerns about the high-level approach, particularly around education requirements.

The code allowance for qualification requirements to be “backfilled” by a financial advice provider's systems and processes put a lot of responsibility on them to determine equivalency and how it could be measured, he said.

He said, while the legislation was principles-based, it would be positive for the code to give tighter guidance.

Bean also said the proposed end of personalised DIMS could lead to being forced into mediocre client outcomes, because it was seen as safer by regulators.

More prescription would mean more uniformity of standards, which was easier to assess and maintain compliance, he said. “There’s a danger in the absence of a minimum standard that people race to the bottom.”

It was also possible that some would go too far in the other direction, he said, and do much more than was required.

Code working group chairman Angus Dale-Jones said the submissions received on the draft would be published in early 2019.