Addressing the FSC Life Insurance Summit on Wednesday, Jane Hume said the FASEA reforms had “only focused on one piece of the puzzle” when it came to necessary reform in the advice sector.
“FASEA was established in order to implement standards including education requirements, a code of ethics and a program of continuing professional development including an exam that represents a common benchmark across the industry,” Ms Hume said.
“But FASEA only focused on one piece of the puzzle, that was creating standards and maximising the quality of advisers. They didn’t focus on keeping the costs of doing business low or making advice readily accessible to consumers.”
Ms Hume acknowledged that the amount of red tape currently being imposed on advisers “increases costs and takes away time from doing their job”.
“For small businesses the problem is even more acute – 90 per cent of advisers are sole traders or part of a small business,” she said.
“The government is committed to the professionalism of the advice industry certainly, but we want to make sure that we maintain a balanced approach to achieving this goal.”
Ms Hume said the movement of FASEA’s standards-setting powers into Treasury, due to take place in January 2022 under draft legislation released earlier this week, would achieve “regulatory alignment” for the sector, while the establishment of a single disciplinary body within ASIC would move the industry closer to a self-regulatory approach.
“The legislation includes the creation of a single disciplinary body for advisers which will be run by industry professionals and administered by ASIC,” she said.
“It’s my hope the passage of this legislation will enable advisers to enforce standards within their own profession in a way that not only meets but surpasses community expectation.”
I know this all sounds like a positive development, but I don’t think it is.
To my mind, the issues strangling the industry all come from two core issues – licensees and vertical integration. We have these volumes and volumes of rules to try and make it possible to provide financial advice, while also ignoring these two inherently conflicted realities.
You remove these two impediments and we’re a helluva lot closer to a profession than where we are now. I know that might upset some people, but it’s a simple fact.
FASEA was an opportunity to move past this. Had it have been done properly – which it most certainly was not! – the ethical burden it placed on us should have replaced the nonsense rules we have to navigate so we can maintain the two original sins at the core of our industry.
It could have led to us being treated as adults, instead of the infantilised cretins all of the rules assume we are now.
The Code of Ethics could have been the foundation of us being able to give advice without file noting til our fingers bled, detailing nonsense alternatives that any adviser with an ounce of sense/experience could have dismissed out of hand.
It could have been the bedrock for a real profession where it’s the individual practitioners that matter, not the damned suits and corporates vacillating between covering their behinds and pushing shoddy product.
But they fluffed it, like they’ve fluffed every other piece of reform in this game, because making the changes necessary to create a sustainable profession would have meant some people rooted in the way things were might have lost money.
I see this as Hume conceding to those powers that be, and smoothing the path back to the way things were, back to the ‘normal’ that was so deeply broken.
What a damned shame.
What a magnificent response. Thank you. I hope you don’t mind if I share this with my colleagues.
This is a great comment.
One thing to notice, though. The incumbents who think they can make money from being a licensee will fight tooth and nail for the status quo. They own the clients, after all.
This model will only stop if there is an adviser association that forbids vertical integration, i.e. nobody can be a member who works for a product provider and if that adviser association becomes sufficiently large.
Both the FPA and AFA could take on that role and if the AIOFP continues to do as well as it during its Hobart conference, then it may have a chance too.
However, it would mean wrenching change for those organisations and, at least in the beginning, being forced to work on a far smaller budget. Ironically, that may be the biggest practical impediment and it is up to us advisers to put up or complain. Nobody will save us. Why should they?
The code of ethics was written by deeply conflicted academics. One of them funnelled his graduates for years to AMP and, unbelievably, is still doing so. These academics put together unworkable conflict of interest requirements due to lack of competence and demanded lots and lots of education with little recognition for prior learning. Surprise.
You’ve claimed it’s two core issues. 1) vertical integration and 2) licensee’s. These are both perfectly well within an advisers control. I choose to avoid AMP, I choose to ensure my licensee had no connection to a product…. Therefore any over regulation is a result of Advisers themselves. If it’s not 1 and 2 it’s therefore something else… and I would say a lack of conflict free representation and a lack of leadership.
Very true.
Agree, not so worried about the AFSLs but the Royal Commission has its big chance and Hayne was either unaware or pushed from tackling the Elephant in the room = Vertical Integration.
The single biggest conflict and the main reason for vast industry failures, top down product flogging targets on Advisers and the impossible ever increasing attempts to regulate the impossible conflicts of interest that is vertically integrated product and advisers.
Had the RC banned vertical integration, the majority of REGS and BS compliance can be reduced and or cease.
But Hayne fluffed it, was pushed not too or whatever ???? Hayne the bubbling fool has condemned the advise industry to eternal unregulatable conflict.
Until Vertical Integration is banned the Regulators will continue to pile masses of useless over regulation on to try to fix the unfixable conflicts.
Imagine Drs being owned and run by Big Pharmaceutical Drug Dealers. The Dr already get prodded and entertained to flog drugs, but most behave pretty well. Of course they would not if they were owned and run by the drug dealers.
THE ONLY SOLUTION = BAN VERTICAL ADVISER OWNERSHIP TOTALLY.
What Jane here says is what many of the commentators here have been saying for a while, only more politely. The code of ethics was designed without regards to costs as academics were in charge and that is now showing.
Jane Hume is actually the most sensible sounding of all those who have power over financial advisers. I would take that on board.
You incompetent, inept, clueless fool. You and your party have presided over the demise of advice in this country. The endless requirement for signatures. The constant need to go cap in hand every 12 months to be allowed to be paid. If only we could apply such a standard to politicians. You have allowed ASIC and FARSEA to ruin lives and destroy business values. What a disgrace.
Wonder Dog, I think what you meant to say was the constant need to go cap in hand every 12 months so we could continue taking their money without having to talk to them.
I seriously question how hard it is to meet with your clients at least once a year. If you aren’t, you should be questioning what value you provide for continuing to take their money.
I’m guessing you have bored retiree clients with lots of time on their hands.
It’s actually quite difficult to meet with busy professional clients on a strict 12 month basis. They have other commitments and priorities. They are happy to do two reviews in 6 months and none for 18 months if it better suits their situation. They are happy to communicate on an adhoc basis by phone and email rather than rigid meetings. And they are very happy to pay ongoing fees for this service because they get value from it. What they are not happy about is being forced to adhere to a rigid schedule, and sign endless swathes of ridiculous forms, just because some idiot bureaucrat demands it.
Duck shove and hide hey MIA Jane, grovelling and lying as you do.
Quick look over there …… Treasury = Frydenberg and his no. 1 Advice Adviser Martin Codina, that have decimated Advisers for the last 8 years.
Come January 2022 there will be lucky to be 15,000 Advisers left, nearly 50% culled in 5 years.
And those left are continuing to be drowned by massive BS over regulation from LNP, ASIC, FARSEA, AFCA, etc.
Advisers should ALL revolt and tell Govt to get stuffed.
Frydenberg OUT !!!!
Martin Codina OUT !!!!
MIA Jane OUT !!!!!
LNP OUT !!!!!!
The mums and dads of Australia that need our Advice need these clowns gone !!!!!!
The three amigoes who created this fiasco Turnbull, Frydenberg, and Odwyer need to called out. Two have hightailed out into the sunset already. Time for the 3rd to POQ too
The FARSEA exam should be more than sufficient for them to appease the masses in what has really been an exercise in futility. This whole debacle eventuated because post the Royal Commission, the government needed to be “seen to be doing something”. Sure, they have weeded out a few dodos that should not have been in the industry in the first place but they only accounted for about 10% of the departures. The other 90% were advisers over the age of 60, who were the most knowledgeable and experienced we had. There is no doubt that this was an unintentional consequence that resulted because they didn’t think their actions through properly. The best course of action that they could take now, is to concede that they may have been wrong and then do away with FASEA’s Bridging Course – Ethics and Professionalism (including the FASEA Code of Ethics and Code Monitoring Bodies). This is complete Overkill on their part and will likely result in even more advisers departing the industry. What they fail to grasp is that there is absolutely no correlation between ones level of education and honesty. They can raise the level of education all they want but a crook will always be a crook. For the most part, all that they have achieved is to leave the smart crooks in the industry. Those being the dishonest advisers capable of stealing their client’s money and getting away with it. I bet that bunch all passed the FARSEA exam with flying colours. So please let us hope that they see sense and stop this rot for the sake of everyone.
Lets get Jane Hume to pass an exam to keep her job!!!!!
Let’s get ALL Pollies and Canberra Bubble Bureaucrats to do:
– compulsory Uni degrees, that are relevant in expertise to what area / portfolio they are in charge of.
– pass a 3.5 hr exam to be allowed to keep their job.
– compulsory 120 hr Ethics course, assignments and 3.5 hr exam. Blind Freddy can see majority of Pollies
– annual wages, bonus and benefits disclosure that must be publically approved pre payment.
Your government caused the problem now you’re backpedaling – LNP for small business – yeah right
They knew this would happen. They did not care. Anything to keep the media happy.
First Hewson now Hume. Say the right stuff do nothing. Exhaustive compliance and red tape almost ending my planning career. What will change.
The Madness continues. Good luck putting the Jeanie back in the bottle Feds. An over reaction for years from the Feds, ASIC and all in general. If labour gets into power, zero commissions on insurance is likely. The Jeanie’s bottle will be smashed. In February 2022 when we finally know the number of advisers that are left after the FASEA testing, the true ramifications of the Witch hunt will be revealed.
jesus christ, mohammed, anyone .. a prayer now 🙂
Bahahahahaha….love it! Sums up the situation perfectly too. Such bloody hypocrites these MP’s, Bruuuuuuuce!
They happily agree to impose such ludicrous standards on others yet rarely do they themselves, have anywhere near enough formal education or even industry experience to preside over the portfolios that they damage so greatly through their misdirected (and often conflicted) legislative changes. What a disaster this industry has become.
First it was that ‘thing’ O’Dwyer, now its Senator Hume. How much actual carnage do they need to see before they concede THEIR FAILURES with LIF, Best Interest Duty and FASEA?
New news releases but no release of commentaries.
Isn’t self-regulation inherently conflicted?
But note Hume did not say they would wind back any of the errors and excesses of FASEA
YES! That’s where rubber hits the road, why isn’t she saying THAT! Repeal all the [b]FARCE-IA[/b] idiocy and damage.
Just like a damn politician….fixing things until its broken. Our tax money goes to thiese folk….give me a break. When you are no good at your job….be a Greens Labor or Liberal politican and ride the gravy train of the taxpayers back.
A “Balanced approach” – Such a detailed solution to the problem – Not. They have not idea where to start. I would suggest that the minister spend a week in the office of a small advisory business and actually learn first hand what goes on.
Its only taken 3 years for the politicians to realise they’ve stuffed the industry right up. And what of the original architects of FARCEA. They seemed to have just ridden off into the sunset without any accountability for the destruction to lives, businesses and the economy they have left behind. But they are more than happy to be leaching off tax payer funded pensions for life now for these great deeds. Where’s the best interest duty there? Double standards yet again.
MIA Jane announces again what a compliance mess the LNP have massively created.
[b]Let’s remember that the LNP have been in Government for 6 of the last 8 Govts, since 1998.
The LNP have caused 75% of this massive over Advice regulation problem. [/b]
MIA Jane previously laughs at the absurdity of 9 different conflicting, overlapping and convoluted Regulators Advisers face.
MIA Jane now admits FARSEA is a total FARCE helping kill the Advice Industry. Great work LNP.
Do we get a refund for our FARSEA course costs and more importantly expensive time wasted ????
What’s MIA Jane doing to fix it ?
BS Polly speak and BS shuffling the deck chairs, there is NO REDUCTION IN BS REGULATION.
There is NO REDUCTION IN BS RED TAPE COSTS.
[b]Quite the opposite: [/b]
– I have our ASIC levy on my desk to pay, double taxation levy at an increase of 160% in 3 years.
– Hume & Frydenberg just legislated a TOTAL 2ND LAYER AFSL COMPLIANCE REGIME AT PLATFORM LEVEL FOR FDS / OPTINS, SOA vetting, etc. Utter costly duplication and BS REGS Madness.
– Hume now announces another so called Single Disciplinary Body that actually still involves 9 Regulators. How does Single = 9 i ask Jane Hume and LNP ??????????/
Frydenberg has to go.
LNP has to change or go !!!!!!!!!!!
SPOT ON! Everything that has happened to this industry HAS been on the Coalitions watch. They’re done in my book…will NOT VOTE for them at next election. Frydenberg can sit on Opposition for eternity for all I care now.
All correct. Hard to see why I would vote LNP ever again. Try harder Hume – I’m still discussing all this with clients. I don’t expect client to vote Labor, but more WILL look for alternatives/independents.
You absolute morons. You do realise Labor were the architects of the shit we are dealing with now? Imagine them with a tail wind of hubris. Vote Labor, just have your resume up to date to work in a call centre at an industry fund on $60k p.a.
Bullsh#t, the last 8 years of LNP have been REGS and Red tape madness.
FOFA was nothing compared to this LNP crap.
Constant knives in the back.
At least we can have a fair upfront fight with Labor.
Vote independent !!!!
I have been telling all my clients about this Liberal created massive destruction of Advisers and how it has lead to FEES increase and Adviser exits. I see about 400 clients a year and the best part is I am in WA where all the Liberal seats are at risk, everyone LOVES Mark McGowen over here Labour Premier that I am sure they will lose enough seats just in WA alone to lose at the next election. Do they think Christian Porter here in WA will get re-elected?
The LIBS will be GONE in 12 months.
“Leave all the strangling to me”
Lip service political speak….too much damage has been caused to repair for many…. 70 year olds with 50 years life insurance knowledge and experience being asked to pay and study for a degree.
If you listen to Danielle Press, the prohibitive cost of providing compliant advice is all the fault of licensee compliance teams.
I though Danielle Press normally states “I don’t know”?
She does or
AFSL and Advisers fault, never ASIC
There will not be a [b]Single[/b] Disciplinary Body. The proposal is for a [b]4th[/b] Disciplinary Body, on top of ASIC, AFCA, and the adviser’s Licensee.
These other 3 bodies are all mentioned in the draft regulatory docs, yet still they have the gall to call it a “Single” Disciplinary Body. Are they illiterate, or dishonest? Or both?
Words not actions, typical politician. They created the mess, have taken no responsibility and give no real plan on how they are going to fix it. At least the ALP have the decency to tell us they are going to screw us. The LNP pretend to be a friend to small businesses and then do everything in their power to destroy the financial planning profession.
So many years of LNP knives in the back
wow they have just worked this out
Hume has not addressed the rising costs of providing Financial Planning. As usual, the elephant in the room is ignored.
Will the last Financial Adviser leaving the Industry put out the lights.
Blah blah blah Hume. Always tell people what they want to hear. Like on the FPA webinar when she said how the government didn’t want to keep adding to the compliance burden THEN they pass annual opt in legislation without any changes.
The solution is to remove the time limit to complete the 8 University Units. For busy older practitioners, this extra study load equates to a $200,000 time impost, for limited benefit long term. Not everyone is in on the intra-fund salary racket, where intra-fund “advisers” have plenty of time on their hands to study (in lieu of doing real advice work). Just run the odd fund member seminar, collect your $140,000 salary & bonuses, & keep studying. What a joke. Hence the massive outflows of retail advisers, prior to Dec 2025. In addition to minimal new entrants into the industry, who will struggle to find anyone to train them. FASEA has become a complete disaster, as existing advisers have to unlock 2 months a year of client time, simply to meet the Dec 2025 study time frame. So yet again it will be the low income families who will pay that price by being declined support services. It’s insane.
For those who want to make things happen, there’s always enough time.
For those who just want to whinge, there’s always plenty of excuses….
Jimmy Brings delivers.
Maybe you should have done further education years ago. Like I had to. In the time after the GFC I did a masters all while transitioning to start a new business. In fact, if more had bothered we may have avoided some of the current BS. But save me your bleatings.
Good for you. Do you want a medal or a chest to pin it on? For all sorts of reasons, many advisers have never had the luxury of spare time to complete further education other than the mandatory.
If you did further education years ago and received credit for it from FASEA, you were extraordinarily lucky. Most of us who already had high levels of education have been forced to pay for more courses. Courses that just happen to be provided by organisations connected to FASEA Board members. It’s called corruption.