In December, the government declared that it would designate advice standard setting to Treasury, while ASIC’s existing Financial Services and Credit Panel will administer the single disciplinary body for the sector.
Jane Hume, minister for financial services stated the change, which supposedly will allow regulatory settings to stay receptive to advisers, had been rolled out in response to rising costs.
“I’m firmly of the view that while it’s important that the regulatory settings remain responsive, they must make it responsive to the will of the people as expressed through the parliament and their elected representatives, rather than being in the hands of unelected officials who aren’t accountable to the Australian people,” Ms Hume said, in an address to the Stockbrokers and Financial Advisers Association Conference.
“In future, standards will be set by regulation issued by the Minister, and subject to parliamentary oversight and potential disallowance.”
Ms Hume admitted the previous regulatory standards did not consider the costs for businesses or how they would impact the accessibility of advice.
“Imposing more and more regulation and training requirements on advisors inevitably increases costs and takes time away from their job. And for small businesses this problem is particularly acute,” Ms Hume said.
“Ninety per cent of financial advisors are sole traders or part of a small business. Now, in the end, there’s no free lunch. We all know that these costs are ultimately borne by the consumer.
“So the government is committed to the professionalisation of the advice industry. But we’re also on the lookout for ways to achieve this goal while reducing the overlap and duplication of regulation that will help drive costs down. And it will also improve the accessibility of advice for consumers.”
The single disciplinary body folded in with ASIC, which already polices the sector, is meant to cut down on duplicate regulation.
As revealed in the recent draft legislation around the single disciplinary body, advisers could be required to complete an annual registration with ASIC. Ms Hume revealed that unlike the current system, where licensees can update ASIC on their authorised representatives after they begin to practise, they will now be required to tell the regulator and authorise the adviser before they start providing advice.
“The annual update information will also mean that the financial adviser register will be more complete and far more accurate, serving as a better resource for consumers, for licensees and for advisers alike,” Ms Hume said.
FASEA
But none of the regulatory changes will free advisers from needing to pass the FASEA exam, the minister was careful to note, with the government to not give any blanket extensions or exemptions.
Ms Hume also defended the FASEA exam requirement for stockbrokers, despite grumbles from the sector.
“Now, I know that the FASEA exam can feel very one size fits all. And many of you have expressed that view to me,” she said.
“In the current exam, stockbrokers had to answer questions where the case study may involve financial planning issues, or life insurance issues, which may not feel relevant to the job that you do today. But what the exam does is create a baseline level of knowledge and underlying principles that can be expected from any financial adviser.”
Stockbrokers, are now more than brokers – with many acting as personal wealth managers, Ms Hume explained.
So far, around 13,500 advisers have passed the exam to date. Around 1,385 stockbrokers have passed.
So LNP set up FARSEA, allowed it to be totally conflicted, unethical and impractical.
Now LNP say FARSEA hasn’t been done properly so we will move it sideways to ASIC & Treasury to try to fix it.
Yep the same ASIC that paid for conflicted comments to make FAESEA so unworkable.
Four freaking years of this disaster so far, they will let it run for nearly 5 years before actually looking at taking any responsibility.
5 years too late LNP.
Damage well and truely done.
LNP you are a disgrace to Advisers, small business and to our Clients.
LNP time to go !!!!
Very sensible from Jane Hume. She is supportive if we do our part.
huhhh? what does that ffs
‘One size fits all’ Isn’t that the best kind of financial advice?
well no … it dose not !.. haven’t you sat your exam ?!
You’re still not listening Senator Hume and clearly don’t care about the ridiculousness of the FASEA Exam.
Your Government colleagues have forced advisers to undertake enormous amounts of stress (and expense) through an exam that contains content that’s not even relevant to what many of them provide their clients advice on. Of 70 questions, apparently ONE is specifically relevant to me as a Risk Insurance adviser. I’ve never had ONE complaint and 99% of my claims have been paid so my ethics aren’t in question.
You’re a Finance Minister (for now); would you consider it fair (and/or reasonable) if your were forced to do a 3-4 hour exam on Industrial Relations or Health or Defence Force Strategies and Spending to do your job?? They’re all parts of what Federal Minister’s do, even though they aren’t what you do.
Many would also argue the impact of YOUR decisions and the decisions YOUR colleagues make in their respective portfolios have far greater and much longer implications than those of a Risk Insurance adviser like myself.
Why aren’t you and your colleagues being subjected to the same unfair requirements? The double standards are horrendous. How can you still think this is an acceptable benchmark and fair playing field just staggers me.
All lies. Hume just pushed through the 12 month opt-In legislation which is a dogs breakfast. Advisers are banned from getting client consent early, so must force clients to wait 365 days for their review meeting. Who thinks up these insane policies? If we do meet early, we must send our documents via post or get our clients to scan documents for our service to continue as the platforms won’t accept consent via email. Jane Hume and this rotten Coalition government need to go. They haven’t listened to us in Government. Maybe they will listen when they are in opposition.