Monitoring bodies will operate compliance schemes to monitor and enforce compliance with the code of ethics.

A monitoring body for a compliance scheme applies to ASIC for approval of the compliance scheme.

In light of this requirement, six of the professional associations representing the financial advice sector have signed a cooperation agreement to develop a code monitoring solution for their members.

The six professional associations currently participating in the agreement are Financial Planning Association of Australia, Association of Financial Advisers, Boutique Financial Planners, Financial Services Institute of Australasia (FINSIA), SMSF Association, and Stockbrokers and Financial Advisers Association.

The associations have agreed to work together to submit a code monitoring compliance scheme application to ASIC.

FPA chief executive Dante De Gori said that “it is an important step forward for the financial advice sector that will facilitate recognition as a profession, which has long been sought by our collective members”.

“Being covered by a code monitoring compliance scheme is mandatory. All existing financial planners and advisers will be required to subscribe to an approved scheme by 15 November 2019,” Mr De Gori said.

“The cooperating associations are united by a joint purpose to ensure that financial planners and advisers can choose to subscribe to a professional associations-based scheme.”

Mr De Gori said that the agreement will mean that better economies of scale provide an efficient, streamlined code monitoring solution for the financial advice profession.

Under the agreement, a special purpose company called Code Monitoring Australia has been established for the purpose of operating the scheme. The scheme will be called the Financial Advisers Monitoring Scheme.

The cooperating associations will engage with consumers, other associations, financial advisers, licensees and other stakeholders to develop the compliance scheme, the chief executive said.

“I sincerely thank the cooperating associations for taking this unprecedented step in working together. The final application is due to be lodged with ASIC by 30 June 2019,” he said.