Passed in Parliament last week, the bill ensures that the financial services and credit panel within ASIC becomes the single disciplinary body for advisers from 1 January 2022.
The legislation will also see the removal of the Tax Practitioners Board (TPB) as an advice regulator and that FASEA be wound up, with its responsibilities to be given to Treasury and ASIC.
While the Association of Independently Owned Financial Professionals (AIOFP) approves of a streamlined regulatory process, executive director Peter Johnston told ifa that stakeholders must understand that advisers want the best outcome for their clients.
“We need the bureaucracy to understand this concept,” he said.
“We do not have a conflict when dealing with potentially ‘bad apples’, we actually have an incentive to remove the person from the industry to prevent any reputational damage to our profession.”
Mr Johnston also called for practising financial advisers to be included on the panel, who can best assess complaints put against an adviser.
“Panel members with accounting, law or social science degrees do not have the expertise to assess the technical aspects of advice,” he said.
“Only appropriately educated and authorised advisers can do that.”
Similarly, the Association of Financial Advisers’ (AFA) general manager, policy and professionalism, Phil Anderson, said the industry group harbours concerns about ASIC’s power to investigate minor breaches without having to refer it to the panel.
“This will add unnecessarily to the cost of running the single disciplinary body, which ultimately financial advisers and their clients will need to pay for,” Mr Anderson said.
“We will be calling for these changes as part of the quality of advice review that the government has committed to running in 2022.”
Mr Johnston told ifa that ASIC must also “immediately” address the FASEA education pathway, which is “unclear, confusing and to some institutions, discriminatory”.
“We can’t have advisers spending money and time on courses that don’t qualify, we need clarity as a matter of urgency,” he said.
However, confirmation by the government that the FASEA exam cut-off date has been extended to 30 September 2022 for advisers who have attempted the exam twice prior to 1 January 2022 was applauded by the AFA.
“Greater certainty on the exam extension is important for those advisers who are awaiting the results of the September exam, and others who are preparing for what was to be the final exam in November,” Mr Anderson said.
The Advisers Association (TAA) chief executive Neil Macdonald told ifa that it welcomes the bill as it starts the process of removing “duplication for advisers”.
“However, a lot more is required in order to build a strong profession that better enables advisers to provide quality advice cost effectively for most Australians,” he said.
Earlier, Financial Planning Association of Australia (FPA) CEO Dante De Gori said the legislation is a win for the industry and will allow advisers to focus on their clients and on the “challenge of providing financial advice to more Australians without the distraction of constant regulatory change”.
“The past two years has been another period of significant reform that has overhauled the regulation and practice of financial advice in Australia,” Mr De Gori said.
