Compliance, Disclosure and Ethics
Regulatory obligations
Candidates must understand disclosure requirements: Product Disclosure Statements (PDS), Financial Services Guides (FSG), and SoAs. The Corporations Act and ASIC Act impose conduct obligations, including the design and distribution obligations (DDO) and the hawking prohibition. Trustees must report to APRA and meet annual member meeting and portfolio holdings disclosure rules.
Ethics and conflicts
Advisers must manage conflicts of interest, disclose remuneration (including commissions where permitted), and act with integrity, objectivity, and professionalism. The Code of Ethics (Financial Planners and Advisers Code) sets six standards, including acting in the client's best interests and avoiding conflicts.
Traps
Examiners test the difference between general and personal advice disclosure, the timing of the FSG, and whether a conflict is disclosed vs managed. DDO requires a target market determination; a product sold outside it is a red flag. Hawking rules restrict unsolicited offers.
Rule of thumb
If a benefit or commission could influence advice, disclose and manage it. If a product is offered to a client outside its TMD, stop and reassess.