The Corporations Amendment (Register of Relevant Providers) Regulation 2015 – which was signed into law by the governor-general Peter Cosgrove last Thursday 12 February and made public yesterday – is the final say on the register, which will launch on March 31.
It amends the original legislation to require that the “controllers of body corporate licensees” provide information about associated providers of financial product advice, such as employees and authorised representatives.
Licensees will be obliged to provide information about the relevant products an individual is permitted to provide advice on, as well as details of “recent advising history”, education and “membership (if any) of professional bodies”.
They will also be obliged to notify ASIC when there is a change in adviser details or licensee ownership, with penalties in place for failing to comply.
The register itself will contain all of the measures previously announced following the ill-fated deal between the government and the Palmer United Party, including any relevant banning orders or disqualifications as well as qualifications and memberships.
However, the regulations have also introduced two new elements replacing the controversial proposal to include “details around ownership of the financial services licensee and disclosure of the ultimate parent company where applicable”.
Instead, the register will contain details of “each person who controls” the licensee and the ABNs of associated entities.
“Control” is defined in the Corporations Act as having either “more than one half” of the votes that might be cast at a general meeting of the licensee, directly or indirectly holding more than one half of the issued share capital of the licensee or the capacity to control the composition of the licensee’s board or to determine the outcome of decisions affecting its operational policies.
Speaking to ifa, Minter Ellison partner Richard Batten confirmed that while the wording has been changed since former acting assistant treasurer Mathias Cormann announced the proposed register contents, it will have the same effect of more explicitly disclosing AFSL ownership.
“The control requirement would require the register to state the ultimate holding company of the adviser’s licensee,” Mr Batten said. “If the licensee is owned by a bank it would seem to require not only the bank to be named but also each other company between the bank and the licensee in the corporate structure.”
Inclusion of AFSL ownership details was one of the more contentious issues debated by the Industry Working Group, made up of representatives of the FPA, AFA, AIOFP, IFAAA and the industry funds and banking sector lobbies among others.
I find it unlikely that a client who’s not likely to read an fsg or long winded soa is going search a register… Nor does it mean that we can thin out our fsg or long winded SOA’s. As stated by melb planner, where will it end. This isn’t a solution, and disclosure hasn’t become obsolete, it’s just another ‘thing’, and it’s likely that when this doesn’t work, there’ll be yet another ‘thing’, not to replace, but to add to, like every other ‘thing’.
Sorry if I offended, it wasn’t intended to be a personal attack. The point I was trying to make is that disclosure alone has been shown not to work. The relevant disclosures are in documents (FSG, long winded SoAs full of legal butt covering) that clients probably don’t read or full understand. At least a register should weed out those that are not licensed and provide a source of comparison for the more savvy consumer.
I can’t see the justification for the non-aligned v aligned quarrel any more. All advisers have to satisfy best interest duty and all operate under the same regulatory requirements. If you rollover from one platform or super fund to your preferred provider without a pretty good reason you’re probably headed for an ASIC EU. Why would you put your clients in hundreds of different investments anyway…stupidity. The argument is redundant and we ought to move on.
Really, did you just twist my words, pathetic.
I would suggest you read the comment correctly.
So melb planner, you are happy for full disclosure, as long as you are confident the client won’t actually read it?
ALAN, my comment was not, “Do clients read FSG” but that the required information is contained therein.
I am all for full disclosure, especially with regard to any previous banning orders against advisers that SHOULD be disclosed anyway, How about the advisers who get banned, but then phoenix their business, running it in the background with somebody else as the responsible office, license holder, and this happens VERY frequently.
Are you kidding melb planner? my clients sure as hell dont read FSGs. there should be a giant bank logo on the window, business cards, polo shirts etc. of every aligned adviser. register is step in the right direction but not far enough
Where will it end, i thought all the information regarding advisers was set out in the FSG?
“Great!”, I thought, full disclosure. Bring it on! Sadly that’s not going to be the case. A persons name and the ABN of each associated entity – why so secretive? Do these people have something to hide? Would it have something to do with product providers and ownership of licencees for distribution? Introduce the requirement to be categorised as either Independent and non-independent and problem solved.