In its annual report for the 2020 financial year, the FPA stated that it was “imperative” the Coalition use the introduction of the disciplinary body, slated for mid-2021, to “consolidate the current regulatory framework”.
“A single disciplinary body must streamline regulation,” the association said.
“This consolidation would not only benefit financial planners by reducing costs and driving efficiencies, but would allow them to potentially offer more affordable advice to more Australians.”
The FPA suggested the disciplinary body should assume “key functions of ASIC, FASEA, and the TPB as they relate to financial advice, thereby having primary responsibility for government oversight of the conduct of financial planners, setting mandatory professional standards, investigating potential breaches of mandatory standards and law, and applying discipline”.
“A single disciplinary body should be a single source of truth,” the association said.
“Improving the productivity of financial planning practices and those that regulate them is essential for the continued growth of the profession and the provision of affordable financial advice”.
Lifespan Financial Planning chief executive Eugene Ardino also told ifa the new body should look to limit “duplication and confusion” among advisers about where their responsibilities lay.
“The current regulatory enforcement regime we are under with ASIC holds us to an extremely high standard, as does the FASEA code of ethics, so I don’t know what more a disciplinary body can add to that,” Mr Ardino said.
“What I’d like to see is a limit to any duplication, so if responsibility is going to be put on the disciplinary body for certain things, advisers and licensees shouldn’t answer to different bodies for the same thing. I think that causes confusion and duplication.”
Mr Ardino said if the many regulatory agencies already responsible for parts of the advice industry were not streamlined, it could lead to “unnecessary duplication or having different bodies with different interpretations” of advice law.
“If this body is going to handle disciplinary action, perhaps that needs to be looked at in conjunction with what ASIC is responsible for,” he said.
The FPA lost advisers the chance to have single over sight body and any chance to be a self regulatory group out of fear of upsetting Sam Henderson. The Royal Commissioner said these associations were incapable of being a code monitoring body. The FPA don’t have any credibility and if they do believe so strongly in it then why does the Board remain in place after the Royal Commission. Why is that FPA advisers support this call yet still support the CEO? Let’s remember with self regulation comes less Government intervention and the FPA blew it. [b]The only thing coming out of the advice industry is complaints…what’s needed is leadership and the token sacrificial head on a stick and it needs to be Dante De Gori and the FPA. [/b][b][/b][u][/u][u][/u]
These are two quite different comments.
On the one hand, the FPA are saying that the new body should replace some/all of the duties of the many regulators we have to deal with – a worthy argument, I think we can all agree.
While Mr Ardino seems to be saying he’s ok with them coming in on top of everything else. So long as they do it a bit better and avoid ‘unnecessary duplication’.
Personally, I align more with the FPAs approach – it’s time for radical change, not more hopeful incrementalism.
And am I the only one laughing at the head of a licensee arguing against ‘unnecessary duplication’ – if the current AFSL model isn’t the embodiment of unnecessary duplication, I don’t know what is!
Ardino is attempting a diversion. His real agenda is opposing the FPA’s excellent suggestion to remove AFSL based licensing of advisers in favour of individual registration as used by doctors, lawyers, and accountants.
AFSL based licensing is the tool used by product companies to acquire and control a “distribution channel” for their products. Every licensee with an inhouse managed account or badged platform or SMSF administration service is ultimately a product company.
One regulator – what would all the people (not qualified to provide Financial Advice) working in Compliance, Dealer Groups, ASIC, FPA, TPB, FASEA all do them? Not to mention all the “expert consultants” getting around the place earning good money dreaming up methods to implement more compliance to develop and improve the need for further “expert consultants” (ASIC likes the term “Independent Expert”), more audits etc. ASIC to rule over ASFL’s who rule over Advisers, who produce endless amounts of compliance documents, then get audited each year by another unqualified to provide advice expert, then don’t forget Trustees now looking at Advisers to check that fees are allowable – more compliance people. Then the ASIC look back – what a money maker that must be for the consultants and lawyers.
I just hope the FPA losses the ability to pay Dante.
The key way to eliminate regulatory costs is to align retail advisers with the 1000 intrafund advisers, who enjoy the luxury of not wasting one second on chasing up Opt-Ins to get paid. Opt-Ins should only exist with the Statement of Advice, whenever it is issued. Until Opt-Ins red tape is addressed, the playing field is as level as the Himalayas.
Opt-Ins should be opt-out. Pretty simple and logical I would have thought.
This industry is slowly being strangled to death.
The level and impact of regulatory overreach has been counter productive and has done nothing more than increase the cost of advice, limit the access to advice and created a toxic environment within financial services significantly contributing to increased mental health issues.
This is a clear example of when bureaucratic and legislative overreach is implemented without adequate assessment and analysis of the consequences.
It also defines the lack of understanding from Govt and the regulator as to what financial planning is really about at ground level and what the client truly values as core components of the advice relationship.
There have been so many errors made based on ideology and often misguided agendas that the results have in fact created an environment that is now less valuable and is destroying small business because of massive duplication, red tape and compliance requirements that deliver no real or identifiable value to the client relationship.
It has been a failure of immense proportions and is killing the financial services industry.
If this is what they want as an outcome, then are they well on the way to achieving their goal.
In full agreement. A single body with oversight over financial advisers will probably result in everyone being on the same page and one contact point for consumers.
Be careful what you wish for.
It couldn’t be worse than what we currently have. If the board consists of a majority of experienced, practicing professionals (is that really too much to ask, hell every other profession has this!) then we will be on the right path and consumers will be the big winners
Sadly, many within Government (and especially those that provide advice to Ministers) are reluctant to do themselves out of a job. It will take a concerted effort from many industry voices to not only ask for this, but be really clear about the benefits and the risks associated with doing it.
It does not take a brain to suggest we have ONLY one controlling body. It will require intelligence to implement. Not sure if other professions have multiple “” gods “” to answer to but we are the ones being held accountable – wonder if such a level of intelligence exists to solve the issue OR is everyone just looking after their job at our expense.