Government to roll advice regulation into Treasury, ASIC

In a joint statement released late on Wednesday, Treasurer Josh Frydenberg and Assistant Minister for Superannuation, Financial Services and Fintech Jane Hume said the government would seek to respond to the royal commission’s recommendation around the single disciplinary body by handing the task to ASIC’s existing Financial Services and Credit Panel.

“The FSCP currently supports ASIC in the exercise of its regulatory functions with respect to the making of banning orders against individuals for misconduct,” Mr Frydenberg and Ms Hume said.

Expanding the role of the FSCP will leverage its extensive expertise and existing governance structures, avoiding the need to establish a new body to perform this role.”

The panel currently consists of a number of members active in the advice industry, including former AFA chief executive Brad Fox, Commonwealth Bank advice compliance executive Gaye Simpson and former MLC head of advice compliance Gayle Cilfone.

Mr Frydenberg and Ms Hume said consolidating the new function within ASIC would “avoid regulatory overlap and minimise the possibility of multiple investigations by multiple agencies into the same conduct related to the provision of financial advice”.

Following industry and political pressure that has dogged the authority around its implementation of the adviser standards framework, the government also moved to wind up FASEA and roll its standards setting powers into Treasury.

“Remaining elements of FASEA’s role, including administering the adviser examination, will be incorporated into the FSCP’s expanded mandate,” Mr Frydenberg and Ms Hume said.

“These reforms will further streamline the number of bodies involved in the oversight of financial advisers, resulting in FASEA being wound up.”

Legislation enacting these changes would be introduced to Parliament in the first half of next year, the statement said.

Commenting on the announcement, AIOFP executive director Peter Johnston said rolling disciplinary responsibilities into the FSCP was “a sensible decision”, and warned advisers to remember the scrapping of FASEA was “only the demise of the entity, not the rules”.

“We feel for Stephen Glenfield, who has done a great job in recent times under difficult legislative conditions to support the advice community,” Mr Johnston said.

Stockbrokers and Financial Advisers Association chief executive Judith Fox agreed that rolling disciplinary responsibilities into ASIC “makes sense”.

“It is a common-sense approach to have Treasury responsible for setting the education, training and ethical standards in the financial advice sector,” she noted. 

“This will ensure alignment with the approach to policy arising from the Hayne royal commission recommendations.”