The AFA warned that annual renewal will represent another substantial cost to financial advisers and that providing advice to everyday Australians will only become more difficult under the new law, which is set to go into effect on 1 July.
“The legislation is another royal commission related bill that has been pushed through the Parliament with undue haste and lack of due process. We have repeatedly seen these bills submitted and passed without a Regulation Impact Statement or any form of parliamentary inquiry and inadequate debate of the substance of the bill,” the AFA said.
“The inevitable result of this is an increasing number of unintended consequences which will have negative implications for financial advice practices and flow on effects in terms of extra cost and complexity for clients. These issues will need to be fixed down the track.”
The bill passed Parliament last week despite significant lobbying from a number of advice bodies and proposed amendments from cross-bencher Rex Patrick, which were later withdrawn.
“We are pleased that the government has made significant improvements to the final Hayne Royal Commission Response No. 2 Bill, relative to the January 2020 exposure draft, however we are disappointed that the government has failed to take onboard our sensible feedback on the bill, which would have served to improve the efficiency of the process and to make it more user friendly, without undermining the intent,” the AFA said.
“The government will need to work out how to fix the important issue with timing differences with FDSs, that has led to ASIC recommending that advisers manually check product systems to confirm that FDSs are correct. The failure to address this as part of this reform, when the Government is simultaneously talking about red tape reduction, is disappointing.”
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Interesting IFA poll from May 2019 69.8% of respondents thought re-election of the Morrison government would be good for advisors.
Morrison government is an absolute joke and I personally when the next election is called be discussing with all of my clients why not voting for the LNP is the better option.
Frydenberg is so Bank aligned and pushing Real Advisers to death so the banks can use mythical Robo Advice to flog products.
Frydenberg is totally corrupted and needs to be removed !!!!
the legislation is designed to drive consumers away from advisers – and advisers exit the industry – in favour of big business for the Liberals , the intent of the legislation to protect consumers will backfire.
It is usually Labour that is for big businesses as they are more easily unionised. I can’t see big business running a licensee at any size that is profitable. One of the many conundrums of financial advice.
Can’t say we didn’t see this coming because the bozos making these rules are following an agenda…
Very happy I sold my FP business in 2020. Good luck to the remaining advisers left to deal with this mess as the government has just created more costs to serve clients with no additional benefits so you might like to tell your clients they did this and maybe break it down like this for them?
Advice cost $a
Government imposed regulations levy $b
Tax Practitioners Board levy $c
ASIC adviser levy $d
FASEA levy $e
Total = $a+b+c+d+e
Agreed. Jane Hume doesn’t look good in storing enormous trouble for the future, just to have a slightly easier passage right now.
Five years jail will completely spook all compliance departments. Not only can you lose everything, whether you are an adviser or licensee, but in the wrong climate you can end up in jail.
Completely missed the point with the issue being raised by AFA….what about the duplication/replication of fee info already being provided to clients and the increase in costs this legislation causes? Only people to wear this cost will be the clients!! And no RIS again….doesn’t the Constitution state there must be a RIS for tabled legislation implementation/amendments?