The government’s rush to assure the industry before the end of the year that FASEA will soon be gone for good is testament to the degree to which the authority has been a political thorn in its side since its establishment.
The announcement on Wednesday night that FASEA was to be wound up and its powers rolled into Treasury and ASIC’s Financial Services and Credit Panel – which would soon also hold responsibility for adviser monitoring and discipline – was sudden, but not a surprise to many in the industry.
“I don’t think too many people would be surprised – it’s one thing for the industry to disagree with rules that are made, but it’s another when so many people are expressing so much confusion,” Lifespan Financial Planning chief executive Eugene Ardino said of the authority’s demise.
“Nothing’s going to be 100 per cent perfectly clear when you’ve got changes like this, but there were so many impracticalities. The [FASEA] guidance demonstrated there was a lack of understanding, and certainly a lack of empathy.”
Since its establishment against a backdrop of relative industry support for the transition to professionalism, FASEA has been beset with internal leadership struggles, administrative delays and a lack of clear communication to industry around its mandate and program of reforms, which has slowly eroded its social licence among advisers.
Industry participants have commended current chief executive Stephen Glenfield for his efforts to turn the ship around, but given the barrage of complaints received by Coalition MPs used to banking on the political support of the advice sector, it may have been a case of too little, too late.
The authority’s bumbling had also become a key political tool for Labor to recruit more votes in the adviser community, with the opposition continuing to speak out at industry events over the course of 2020 around FASEA’s poor handling of a once in a generation transformation in the industry.
Industry speculation has been building in the latter half of 2020 that, with its funding coming to an end and a number of its directors’ terms due to expire, FASEA would be rolled into the adviser disciplinary body mandated as a recommendation of the royal commission.
However, the suddenness of the decision, coming days before the traditional end of year shutdown period, was a surprise. It’s understood the authority was not consulted before the government’s announcement, with a board meeting slated for this week to decide the fate of FASEA chair Catherine Walter.
It’s an irony some in the advice community may take heart in, given the seeming lack of consultation given to industry around certain key facets of the FASEA standards.
With ASIC’s panel set to drastically expand its role to include adviser disciplinary duties as well as key tasks that previously belonged to FASEA, such as administering the industry exams, there is still a lot to work out around how the new streamlined regulatory system will function in the new year.
However, the concrete acknowledgement from government – after years of industry frustration – that the current system is not working may bring some added relaxation to many advisers’ Christmas holidays.
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