Advice fee consent changes pushed back to end of year

The regulator made the update as part of its revised timetable of ongoing work following the COVID-19 pandemic, saying it would release an update to RG 245 around advice fee consents and make the relevant legislative instruments in December 2020, “subject to passage of legislation”.

In the update, the regulator also noted it intended to release a draft legislative instrument around reference checking for financial advisers in October 2020, or earlier if legislation was introduced to Parliament before that date.

Updated guidance around breach reporting for AFSLs would now be pushed back to February 2021, ASIC said.

The regulator also released its interim corporate plan for 2020-21, announcing it had created a new working group to respond to “a marked increase” in the provision of unlicensed advice as a result of the COVID-19 pandemic.

ASIC said the group would expand its “unlicensed advice regulatory toolkit” so the regulator could more effectively identify and take enforcement against unlicensed advice.

As part of the plan, the regulator said it would also carefully monitor the use of its relief provisions around low-cost super advice among both IFAs and intra-fund advisers in super funds and “take enforcement action where appropriate”.

In addition, ASIC said it would move to ensure consumers experiencing financial hardship would not have their money trapped in frozen managed funds, by establishing standard relief and eligibility criteria through which investment managers needed to release client funds.

The regulator said it would “explore a potential industry wide solution, such as making a legislative instrument” to ensure consumer funds were released.

In the insurance sector, ASIC said it would be reviewing a sample of policy documents and monitoring policy negotiations around group insurance, to ensure exclusions were not inserted following the crisis that would harm consumers.

The regulator noted that in the current environment, it was likely that “cover exclusions may be introduced into new life insurance policies at renewal as a response to current and emerging risks”.

“There is a risk that some products may no longer meet policyholders’ needs or expectations, particularly if these are not clearly communicated,” ASIC said.