Code of Ethics: values and ethical behaviour (Standards 1-3)
The five values that sit above every standard, and the ethical behaviour standards: obey the law and its intent, act with integrity in each client's best interests, and do not act with a conflict.
Applied ethical and professional reasoning and communication·2 min read·4 sections
✓Checked against: Financial Planners and Advisers Code of Ethics 2019 (F2019L00117) cl 4-5, Standards 1-3; Corporations Act 2001 s921E (compilation 19 Sep 2026); 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
✓All relevant providers must comply with the Code (Corporations Act s921E).
✓Five values: trustworthiness, competence, honesty, fairness, diligence. They are paramount: every other provision must be read to promote them.
✓The Code imposes ethical duties that go above the requirements in the law.
✓Standard 1: act in accordance with all applicable laws, including the Code, and do not try to avoid or circumvent their intent.
✓Standard 2: act with integrity and in the best interests of each client.
✓Standard 3: do not advise, refer or act in any other manner where you have a conflict of interest or duty. It has no disclosure-and-consent exception.
✓'Benefits' include monetary and non-monetary benefits but not any fixed component of remuneration; bonuses are benefits.
✓Provisions must not be read down by reference to other provisions unless the Code expressly says so (cl 4(2)).
▸On this page · 4 sections
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Traps that cost marks
→Technically lawful steps that defeat a law's purpose breach Standard 1.
→The amount and the client's wealth are irrelevant; integrity is not proportional.
→Disclosure works for Corporations Act conflicts management, but Standard 3 is framed as a prohibition.
→The Code is binding law for relevant providers, not guidance, and the values control interpretation.
→Lawful under Chapter 7 does not mean compliant with the Code.
→Each option is a real Code value; match the wording to the right one.
→Scope limits what advice is given, not whether an obvious danger is raised.
→A conflict of duty (between clients) is caught by Standard 3 just as much as a personal conflict.
The rule
Read every scenario first through the values. Competence cannot be outsourced; honesty requires frankness even at personal cost; fairness requires objectivity and self-reflection on the limits of your competence.
Standard 3 in practice
•Conflicts of duty (for example, acting for two clients with competing interests) are covered, not only conflicts of interest.
•Referrals are covered as well as advice.
•Disclosing the conflict and getting consent does not cure it; the adviser must avoid it or decline to act.
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