Regulation of financial services in Australia reflects a double standard whereby financial advisers are held to higher conduct obligations than other providers, Centrepoint Alliance has argued.
In a submission to the Senate’s ‘scrutiny of financial advice’ inquiry, the PIS and AAP parent company pointed out the imbalance in the regulation of financial services that sees intermediaries disadvantaged.
“It is an undoubted fact that financial advice laws have the highest levels of prescription and regulation than any other area within financial services,” the statement from Centrepoint said.
“Other people and entities involved in the provision of financial products and services do not have an equivalent level of prescription or detail over their conduct requirements.”
While the ASX listed financial services company does not support a “loosening of the current financial advice laws”, it draws the Senate’s attention to the “unjustifiably inconsistent” regulatory regime, which allows responsible managers of investment schemes and directors of unlisted companies greater regulatory freedom.
“There would certainly appear to be a disproportionately greater risk for financial advisers than for other participants in the industry, which creates a barrier to entry for financial advisers,” the submission argues.
It also suggests that the government should refrain from making additional changes to the regulation of financial advice until FOFA has matured for an appropriate period.
“As we saw with the Financial Services Reforms of the early 2000s, it generally takes three to six years for the effectiveness of regulatory reform, or at least any shortfalls, to become apparent,” it says.
“Centrepoint submits that the FOFA reforms should be given that time frame to ripen and mature before more changes are considered.”
It also argues that a FOS-like body should be established to take over responsibility for ASIC appeals from the Administrative Appeals Tribunal.
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