Code of Ethics: client care and quality process (Standards 4-9)
Consent to act, best interests and understanding, broad long-term effects, consent to fees and benefits and value for money, complete and accurate records, and good-faith, competent advice.
Applied ethical and professional reasoning and communication·1 min read·3 sections
✓Checked against: Financial Planners and Advisers Code of Ethics 2019 (F2019L00117) Standards 4-9; ASIC Financial adviser exam: Exam preparation guidance v6.0 (Sept 2026) and its reading list.. Independent prep, not endorsed by ASIC.
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Must-know for the exam
✓Standard 4: act for a client only with free, prior and informed consent.
✓Standard 5: advice must be in the client's best interests and appropriate to their circumstances.
✓Standard 5 also needs reasonable grounds to be satisfied the client understands the advice and the products' benefits, costs and risks.
✓Standard 6: take into account the broad effects of the client acting on the advice and actively consider their broader, long-term interests and likely circumstances.
✓Standard 7: free, prior and informed consent to all benefits you and your principal receive; fees must be fair, reasonable and value for money.
✓Standard 7 bars third-party benefits (other than from the principal) unless the Corporations Act expressly permits them.
✓Standard 8: records of clients, including former clients, must be complete and accurate.
✓Standard 9: all advice and products must be offered in good faith and with competence and be neither misleading nor deceptive.
▸On this page · 3 sections
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Traps that cost marks
→A signature proves consent was recorded, not that it was informed.
→Paper acknowledgements are not evidence of understanding when the client cannot explain the product.
→The client's narrow question does not narrow Standard 6's broad-effects duty.
→Consent to a fee is necessary but not sufficient; Standard 7 also tests value.
→Standard 7 is not an absolute ban; it defers to what the Corporations Act expressly permits.
→Integrity may also be engaged, but the standard that names records is Standard 8.
→True statements can still mislead by omission.
→The safe harbour is a statutory concept; the Code does not borrow it.
The rule
Standards 4-7 follow the advice process: consent to act, advice quality and understanding, long-term effects, and consent to remuneration with a value-for-money check that consent does not replace.
Common traps
Trap: A client's signature saying they understand does not meet Standard 5; the adviser needs reasonable grounds.
Trap: Consent to a fee is not enough under Standard 7; the fee must also be fair and reasonable and value for money.
Trap: Standard 8 covers former clients.
Trap: Standard 9 does not need an intention to mislead.
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