In a statement on Wednesday, the Financial Advice Association Australia (FAAA) said nearly 6,000 financial advisers are yet to be registered with the Australian Securities and Investments Commission (ASIC) despite the passage of legislation in November 2023 and with the deadline looming. Those that fail to register, the body said, are at risk of no longer being able to provide advice.
A central registration requirement for financial advisers was originally introduced in the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Act 2021 and was due to come into force from 1 January 2023, however, it has since been delayed several times.
Since ifa first reported the FAAA’s warning, ASIC has bowed to pressure, announcing in a statement late on Thursday that it would extend the deadline by two weeks, to 16 February, but reiterating that this extension would be its last.
While the responsibility lies with the licensees to register their advisers, as the previous deadline of 1 February approached, and with many individuals still savouring the joys of summer and on leave, it appeared that licensees may had inadvertently neglected the task.
However, in its statement on Thursday, the corporate regulator stressed the severity of the situation noting that advisers who provide personal advice to retail clients without being registered after 16 February, together with their authorising AFS licensee(s), will be in breach of the law and face potential regulatory action.
“After the revised deadline has passed, ASIC will begin a program to check compliance with this requirement and will take enforcement action where we identify advisers who have provided advice while unregistered,” said ASIC Commissioner Alan Kirkland in the regulator’s statement.
Speaking to ifa on Wednesday, prior to ASIC’s extension, Adele Martin, founder of My Money Buddy and The Savings Squad podcast, said the FAAA’s warning prompted her to check whether she was already registered by looking up her adviser record on the Financial Advisers Register (FAR).
Namely, the FAR now has a new field in the first section on “Registration status”. According to the FAAA, if this is showing as ‘Registered’, then there is nothing further required. However, if it is showing as ‘Not Registered’, then it is essential that advisers immediately contact their licensee to confirm the process to complete registration.
“Six thousand seems like a lot, considering there’s only like 16,000 advisers left,” Ms Martin told ifa.
Ben Marshan, founder of Ben Marshan consulting, noted in a LinkedIn post on Wednesday that there’s been “a lot of conversation” this week about registering and, consequently, a lot of confusion.
“The delays, the use of a system that only licensees can access and having to manually register each individual professional, and the timing coinciding with the holiday period has led to a lot of confusion, uncertainty, and just missing when the deadline was,” Mr Marshan told ifa.
But despite this, Mr Marshan clarified that a professional registration obligation for an individual adviser is an “essential step” in recognising that financial advice providers are professionals.
“It’s critical to check if you are already registered; if not, make a declaration to your licensee ASAP and follow up with your licensee to ensure they have registered you,” he advised.
A notable sense of confusion among advisers, coupled with outright indignation towards ASIC, was also evident in ifa’s comments section.
Namely, one adviser wrote that this is a “perfect example” of how ASIC earned its reputations as asleep at the wheel.
“ASIC should be disbanded today and replaced FRESH from the ground up with people who can be trusted to have the best interests of clients and their chosen advisers. Anything less is a continuing insult to taxpayers who finance the current sad farce named ASIC,” the reader said.
A second reader expressed a similar sentiment, writing: “Just ASIC being ASIC. Deliberately keeping it low key, to trip us up. Waste our time with more red tape”.
One reader also pointed to technical problems with the regulator’s website: “A functioning ASIC website would probably make this list of outstanding advisers a lot shorter … it has been a very frustrating experience”.
What went wrong?
The registration process, originating from the royal commission, experienced multiple delays in its enactment owing to parliamentary setbacks.
Moreover, the prolonged delays in setting the deadline have resulted in it coinciding with an inconvenient period and a cumbersome process, where licensees are tasked with gathering information from their advisers for the purpose of registering them on their behalf.
ASIC has issued Information Sheet 276 FAQs: Registration for relevant providers, which provides more background information on this obligation.
I think ASIC forgot that planners go on holidays and have a life (unlike Government departments). They told us this in mid December and put a silly deadline on which did not make any sense. Hence the panic. Thankfully common sense prevails. ASIC are not very smart and unfortunately the people who are doing the right thing are the penalised ones, not the ones hiding away in corners.
If I didn’t read the article on IFA earlier this week, I would have been in breach. ASIC are a disgrace. They clearly want advisers to be in breach so they can penalise us. Why else would they keep it a secret? The process is ridiculously complex too. The ASIC website is terrible and some of the declarations require you to read the Corps Act. There will be many people who miss the deadline or answer some of the questions incorrectly. As long as ASIC have their claws in us, we will never be able to transition into a profession and consumers will be the biggest losers.
This is just a small part of a far greater problem which is that of “productivity”. The fact that productivity is so poor in Australia stems from the fact that it is impacted by so many of these bureaucratic decisions which have no thought as to the time taken and repercussions at ground level. This, as we all know, is a common characteristic in badly managed companies. The frustrations being expressed are part of the growing groundswell right across Australia and not just this industry. The term ‘bungling bureaucrats’ comes to mind – a ‘top down’ culture which needs to focus more on the ‘bottom up’. This may seem offensive – but it is a sad fact and one which our treasurer and other ministers need to take on board and provide leadership. This, especially given that the treasurer is so focused on the productivity issue!! So, another form, another registration. It is easy to mandate these things, from a top-down perspective, but they do bulk up. The registration process (while online and in fairness becoming streamlined) in this case was not immediately clear, and the systems did not seem able to handle the volume of traffic – continually stalling. Marshan and co, if the number is 6,000 – a good wakeup call and well done – but there is a need for association heads to direct attention to those things which affect ‘time poor’ members. Not to do so will just render them part of the ‘top down’ brigade.
It was bad enough being listed in two places in ASIC’s registers, without having to be “registered” again. Who dreams up these time-consuming and confusing requirements???
Why the hell is this needed on top of all the duplication of registrations and portals we already have to use. How about using taxpayers money wisely and get your IT and database systems to talk to each other and integrate. No different to the farce that is the Directors ID’s. What a debacle and further waste of our time. Thanks government, thanks Hayne, thanks ASIC! More red tape to detract us from actually advising clients, which you say is your objective.
An unmitigated disgrace.
I’ve been registered for 20 years+, passed stupid exams that team you nothing
Why can’t ASIC transfer the details from one system to another.
Plus why do I have to pay them $50 for the process?
Bizarre that you can be a current financial adviser but not registered at the same time. Is there a logical reason why ASIC coouldn’t just make all current advisers registered?
As if every adviser did not have enough time to get it done.
More red tape for what? Seems ASIC knows who isn’t registered, will wait until after the deadline, only then will it contact the Advisers.
Part of ASIC Mandate
“administer the law effectively and with minimal procedural requirements”
Bottom Line, advisers are too overregulated. There is too much to follow and too many politicians having their own agendas. I am sick and tired of it all – if I could I’d tell them all where to go I would. Nothing relating to all this compliance is helping my clients and making advice accessable to the public. Go away and fix the Centrelink system so you can look after people who require payments to live. Surely you have done enough and have better things to focus on? I am only interested in making my life easier so I have time for my clients. There is such a thing as “you have gone too far” – surely the numbers of financial planners left tell you this. As for new entrants injecting fresh energy – um, I am all for new generations coming in, but they are green. If you lose more of the experienced good luck.
The Royal commissions outcome are a waste. Just come out and say want all advisors unemployed and you want the union funds to control your money.
Pass a law that SMSF are illegal and only union funds are able to provide aside for super.
when does it stop!