What the Code of Ethics is and where it came from
The Financial Planners and Advisers Code of Ethics 2019 is a legislative instrument. It applies to all relevant providers - financial advisers who are authorised to give personal advice to retail clients. It came into force on 1 January 2020.
The Code was originally made by the Financial Adviser Standards and Ethics Authority (FASEA), which was established by the 2017 reforms to lift professional standards in financial advice. FASEA was wound up in early 2022. Its functions - including oversight of the Code and the exam - transferred to the Treasury and to ASIC. The Code itself was not changed by the restructure. It remains in force and your obligations under it are the same.
You may still see references to the "FASEA Code" in your licensee's policies or in older ASIC materials. That is the same instrument. The name FASEA just no longer describes the body administering it.
The five values
The Code is built around five values. Every standard in the Code traces back to at least one of them. Understanding the values helps when you are reading a standard that is worded in abstract terms - you can ask what value it is trying to protect.
| Value | What it means in practice |
|---|---|
| Trustworthiness | Clients must be able to rely on you to act in their interests, keep your word, and handle their information with care. |
| Competence | You only advise in areas where you have the knowledge and skill to do so properly, and you keep that knowledge current. |
| Honesty | You are truthful and transparent with clients and with your licensee. You do not mislead by act or omission. |
| Fairness | You treat clients equitably, charge fees that are fair for the service delivered, and do not put your interests ahead of theirs. |
| Diligence | You give advice the time and rigour it requires. You do not cut corners on investigation, disclosure or follow-through. |
The twelve standards - an overview
The Code sets out 12 standards. They range from broad ethical principles to specific obligations around conflicts, consent and competence. Not every standard is relevant to every piece of advice, but they apply collectively to how you carry out your role. Five of them come up most often in file notes, complaint reviews and licensee audits.
Standard 1 - comply with the law
Standard 1 requires you to act in accordance with all applicable laws and regulations. This is the floor. The Code does not replace the Corporations Act, the Privacy Act, your AFSL conditions, or any other legal obligation you carry. It adds an ethical layer on top. A breach of the law is also a breach of the Code.
Standard 2 - act with integrity and in the client's best interests
Standard 2 requires you to act with integrity and, where there is a conflict between your interests and the client's, to prioritise the client's interests. This is an ethical restatement of the theme that runs through the Corporations Act obligations, including s961B and s961J. The practical point is that the Code makes acting in the client's best interests an ethical duty, not just a statutory one. A decision that is technically defensible under s961B but is made in bad faith would still be a breach of Standard 2.
Standard 3 - conflicts of interest and duty
Standard 3 requires you not to advise, refer or act in any matter where you have a conflict of interest or duty, unless you have taken reasonable steps to manage the conflict and disclosed it to the client. This is one of the standards with direct file-note consequences. If a conflict exists and you proceed, the record needs to show that you identified it, took steps to manage it, and disclosed it. A file note that is silent on a conflict that plainly existed is a weak position in any review.
Standard 3 and the conflicts priority rule in s961J of the Corporations Act sit alongside each other. The Corporations Act rule tells you what to do when a conflict exists; the Code adds the ethical dimension of whether you should be in the situation at all.
Standard 5 - best interests, appropriate advice and informed consent
Standard 5 has three requirements: the advice and any product recommendation must be in the client's best interests and appropriate for them, and the client must give free and informed consent to act on it. That last element is important. The best interests duty in s961B of the Corporations Act governs your process. Standard 5 goes further and requires the client to actually understand what they are agreeing to before they agree to it.
Informed consent is where the file note earns its place most clearly under the Code. If a client later says they did not understand what they were signing up for, the question is what your record shows. A note that captures what you explained, the questions the client asked, and the decision they made is the contemporaneous evidence that consent was real and informed.
Standard 6 - consider the broad effects of the advice
Standard 6 requires you to take into account the broad effects of your advice on the client's circumstances. This means looking past the narrow transaction to the client's whole financial position and situation. For example, recommending a product that solves one problem but creates a tax issue or an insurance gap elsewhere would raise a question under Standard 6. It encourages holistic thinking and is closely related to the appropriate advice obligation in s961G.
How the Code sits on top of the Corporations Act
This is the piece most advisers need to understand clearly. The Code is not a replacement for the Corporations Act duties. It is an additional layer.
The best interests duty in s961B, the appropriate advice duty in s961G, and the conflicts priority rule in s961J all remain fully in force. You can breach the Code without breaching any of those provisions, and vice versa. In practice, the two bodies of obligation tend to travel together - the same conduct that raises a question under Standard 3 (conflicts) is usually the conduct that triggers s961J, and the same thin investigation that breaks s961B(2)(e) tends to breach the diligence value and Standard 5.
The practical implication is that your file notes need to work for both. A note that evidences the safe harbour steps under s961B(2) - what you inquired about, what you investigated, what you disclosed and the client's decision - also does most of the work for Standards 3, 5 and 6.
What records help you evidence under the Code
A contemporaneous file note does not prove good intentions. It documents your process. Under the Code, the elements that carry the most evidentiary weight are:
- Conflict identification and disclosure. If any conflict existed - remuneration structure, related-party referral, product shelf - the note should show that you identified it, how you managed it, and what you told the client. This is the Standard 3 record.
- What you explained and the client's questions. The more the note captures what was actually discussed - not just what you recommended, but what you explained and what the client asked - the stronger the evidence of informed consent under Standard 5.
- The client's decision in their own terms. A note that says the client "agreed" is thinner than one that shows what they said when you asked if they had questions or concerns.
- The breadth of your review. Standard 6 asks you to look at the whole picture. A note that shows you considered the client's wider position - not just the immediate transaction - gives you something to point to.
- Date, time and channel. A note written the same day the conversation happened is worth far more than one reconstructed later. Contemporaneous means at or very close to the time.
See /tools/best-interests-duty-file-note-checklist for a checklist of what to capture in each file note.
Common Code breaches and what they look like on the file
The scenarios that surface most in ASIC enforcement and licensee audits tend to follow a pattern:
- A conflict not disclosed. The file note has no mention of a commission, related-party arrangement, or product shelf bias. Standard 3. If the conflict is on the file and the disclosure is not, that is hard to defend.
- Consent assumed, not recorded. The client signed the SOA but there is no record that the implications were explained or that the client had a real opportunity to ask questions. Standard 5.
- Advice scoped too narrowly. The note deals with the immediate recommendation but says nothing about adjacent issues in the client's position that a diligent adviser would have at least noted. Standard 6.
- A note written from memory. Time stamps tell a story. A file note dated three weeks after the meeting lacks the texture of a contemporaneous record and raises questions about what else might be missing or adjusted.
- Honesty failures. These are less common in file notes but come up in fee disclosure, where a note does not match what the client was told or charged.
How CallNote helps you meet Standards 3 and 5
CallNote turns a call transcript into a structured file note without recording your calls. It does not join your meeting or capture audio. Your phone system or meeting platform produces the transcript - CallNote receives it and generates a structured note from it. You can also paste a transcript, upload a voice memo, or forward one by email.
The note covers the client's objectives and needs, what was discussed, what options were considered, any conflicts raised and how they were handled, and the client's questions and decision. That structure maps directly onto Standard 3 (conflict identification and disclosure) and Standard 5 (informed consent). A note that captures what you explained and what the client said before agreeing is the contemporaneous evidence that consent was real.
Once you have reviewed the draft, you lodge and lock it: timestamped, SHA-256 sealed, with an append-only audit log. Any later change is an addition, not an edit. That fixed record is the kind of contemporaneous evidence that holds up when a file is reviewed. CallNote is hosted in Australia, never uses your data to train AI models, and never stores audio. See the financial advisers hub for how it fits into your compliance process.
Common questions
What is the Financial Planners and Advisers Code of Ethics?
It is a legislative instrument that has applied to all relevant providers - financial advisers giving personal advice to retail clients - since 1 January 2020. It was originally made by FASEA, which was wound up in early 2022, and its functions transferred to the Treasury and ASIC. The Code itself remains unchanged and fully in force. It sets out five values and twelve standards.
What are the five values in the Code of Ethics?
Trustworthiness, Competence, Honesty, Fairness and Diligence. Every standard in the Code traces back to at least one of these. They are not aspirational - they are the foundation on which the enforceable standards are built.
How does the Code of Ethics relate to the best interests duty in s961B?
They sit alongside each other. The best interests duty in s961B of the Corporations Act governs your process when giving personal advice to a retail client. The Code adds an ethical layer on top - Standard 2 requires you to act with integrity and prioritise the client's interests, and Standard 5 goes further than s961B by also requiring that the client give free and informed consent. A breach of one will often be associated with a breach of the other, but they are separate obligations under separate instruments.
Which Code of Ethics standards are most important for file notes?
Standard 3 (conflicts - did you identify, manage and disclose any conflict?), Standard 5 (best interests, appropriate advice and informed consent - did the client actually understand and agree?), and Standard 6 (broad effects - did you consider the client's wider position?) are the three that file notes most directly evidence. A contemporaneous note that captures what was disclosed, what was explained, and what the client decided addresses all three.
Is this article legal or compliance advice?
No. It is general guidance for Australian financial advisers. Read the Code of Ethics itself, ASIC's published guidance, and your AFSL's own policies, and seek your own advice before making changes to how your practice documents or approaches these obligations.