The working draft – seen by ifa – makes 10 recommendations, the culmination of weeks of debate among the various financial services lobbyists and association representatives that make up the government’s working group in meetings in Sydney over recent weeks.
Recommendation one states that the objective of the register should be to “improve transparency and empower consumers to validate their financial adviser”, with the secondary motive of “assisting licensees and ASIC to track disreputable advisers”.
With a philosophical starting point of “transparency”, the working draft to government also recommends that the register contain 10 key facts about an adviser from the outset of its establishment, including “current licensee”, “licensee history of at least five years” and “detail on what products the adviser is authorised to provide advice in”.
Despite what ifa understands were a number of vocal opponents to the proposal, the working draft also recommends the government includes information on “independence and ultimate ownership” of an adviser and their licensee.
“There has been significant consolidation in the sector in recent years,” the draft explains.
“Today, five advice conglomerates now control more than half of the market. This has resulted in a situation where financial advisers, product providers and investment platforms are becoming more interdependent.”
Specifically, the register should include information on the “ultimate holding company” of a licensee, if that holding company “owned more than 51 per cent of the licensee company”.
Other recommendations include that licensees be responsible for updating information and that “consideration should be given as to whether it would be appropriate for a civil penalty regime to be established in lieu of the current penalty regime”.
With the contentious question of AFSL ownership information aside, the draft reveals that the issue of whether to include information on “adviser qualifications” and “professional association membership” has not been resolved, with the working group committing to provide recommendations on this topic by March 2015.
The group will wait for the outcomes of the FSI and implementation of the initial register before making recommendations on whether the register should include information on “further licensee history, remuneration models and fee structures, links to disclosure documents, information on registered tax agents and employer information”, the draft states.
What information should the adviser register contain? Have your say below.
Will this register also include those property sprinklers who don’t offer investment advice, or do they?
Oh, that’s right, they’re not licensed!
Yawn! Welcome to who cares. The average consumer will never look at this register. It simply makes those involved feel relevant. Oh and a quick note to the FPA. Even if the register does list “professional membership”, I won’t be joining. In the interest of transparency, perhaps the register could also list the top 10 donors to each industry association. Think I’ll get back to advising now.
I suppose all of this information is okay. Some a but interesting. However, as long as all employees of all financial provider organisations that have face or phone contact with clients of the organisation and can or could possibly sell products, I mean provide advice, to clients are also listed along with all the same details as advisers, including qualifications, previous employers etc. Then perhaps this new register may prove to be a good move for everyone.
Will be interesting to see how this idea is accepted by the ISF etc, and if the lobby groups are serious, it must be how the register is framed, otherwise what is the point.
I can understand the disclosure of licensee ownership but to drill down several levels of detail about the Authorised Rep is a bit far fetched. The ASIC register already shows historic and current licensing details about an AR plus a banned register, what more do you possibly need to know about an AR that isn’t already on the ASIC register and in their FSG?? When will this ISF agenda driven scrutinisation of financial planners ever end?