The Financial Sector Reform (Hayne Royal Commission Response No 2) Bill 2020 was listed on the House of Representatives’ notice paper this week but failed to come up for debate before the house was adjourned until 15 February, meaning the passage of the legislation through both houses of Parliament is likely to take some time.
Following the AFA’s recent comments that the specifics of the bill were at odds with product providers and licensees’ fee systems, the association’s general manager of policy and professionalism Phil Anderson said the AFA was still hopeful of last-minute amendments to the legislation.
“We have raised a number of issues in terms of problems with this bill and we would like to see them fixed,” Mr Anderson said.
“Ideally, it should go to a Senate committee for an inquiry, so that they can consider any issues and options for improvement.”
The comments came as the standing committee for scrutiny of bills flagged a number of areas of concern with the bill, including that it sought to make improper keeping of fee records by advisers a criminal offence punishable by a maximum five-year jail term.
“The committee’s expectation is that the rationale for the imposition of significant penalties, especially if those penalties involve imprisonment, will be fully outlined in the explanatory memorandum,” the committee’s report said.
“In this instance, the explanatory memorandum does not provide any justification as to why it is necessary and appropriate to impose a significant maximum penalty of five years imprisonment for failure to comply with the record-keeping obligation.
“Nor does it include any reference to whether this level of penalty is comparable to similar offences in other Commonwealth legislation.”
The report requested “detailed advice” from the Treasurer as to why such a penalty was necessary, and also said it was not appropriate to leave the detail of the records that must be kept by advisers to regulation, which was not subject to parliamentary scrutiny.
Meanwhile, the AIOFP said it was also engaging with cross-bench senators including Jacqui Lambie, Rex Patrick and Pauline Hanson to raise the possibility of their withdrawing support for the bill in the Senate.
“We are greatly concerned with the proposed legislation – the disclosure material is duplicated three times in existing compliance obligations by advisers and will cost consumers an additional $1,400 [a year] to implement,” AIOFP executive director Peter Johnston said.
so stealing cars on drugs while on parole gets a slap on the wrist, 5 years for inadequate record keeping does seem a bit EXCESSIVE !
Sorry clients, if you do not return fee renewals within the prescribed time, the fees will be switched off and if you come back, it will be as a new client with all the associated costs of soa etc. I’m not going to jail for anyone and my fees will go up to cover the additional risk. Well done Canberra idiots.
Someone is taking the piss!
In secret discussions one of the bureaucrats says “How can we get lots of pesky advisers into jail like Andy from Shawshank Redemption?” Another answers “Wait I have an idea…!”
More red tape to follow. Its not just annual fee agreements, its the platforms now chasing signatures too. How exactly does this lower the cost to clients? it doesn’t.
And certain platforms would like clients to cut and paste their original signatures because even a slightly harder pen press is being flagged as ‘not the clients signature’.
Being a Compliance Manager sending a few Advisers to Jail for record keeping might make them wake up, there is no excuse today not to have records up to date , as to the FDS debacle I thought this government was about removing red tape.. seems we are using all the red tape removed from other areas.
Enjoy your time in the sun. By the end of the year, adviser numbers will be down 50% from 2019 levels and by 2026 we will be less than 5,000 in number. Most will work for industry funds, which will not require any record keeping because ASIC will give them special concessions flowing from their sham consultation into affordable advice. So unless you are one of the lucky few who remain, you will need to find a new job. Good luck with that. Maybe a parking inspector?
You will shortly be out of a job with that attitude…either because you’re fired or you have no advisers left to check up on.
you obviuosly already have your corrupt job at the industry funds….. red tape makes it more expensive to the consumer.. oh thats right ASIC dont care about the consumer
maybe a few compliance managers should go for providing inaccurate audits over the years…it goes both ways
Sending advisers to jail for not keeping proper fee records is absolutely crazy! Shame on the Coalition and the Treasurer for even trying to put a bill like this through. Did they consult with industry on this one?
Who has gone to jail for no proper documentation and record keeping with regards to Shipton’s and Crennan’s ability to claim various expenses? No rules for those who make rules for others!
I’m guessing they are trying to get rid of the defence of advisers who deliberately don’t keep records because they are committing fraud. It does seem harsh on the surface.
Yet again it is the Phil from the AFA and Peter from the AIOFP doing all the heavy lifting trying to save adviser practices. What the hell is Dante and the FPA good for??????? Absolutely NOTHING!
FPA are useless glad I don’t give them my hard earned anymore after quitting as a long time member.
“sparks industry hopes”?? This annual agreement excessive overreach is more like an “industry death sentence”!
Utter Canberra Bubble Bureaucratic Madness.
Pollies and ASIC say we want more affordable Advice = MORE BS duplicated paper work at every turn.
Treasury have been pressuring Admin platforms to implement this pre the Legislation. That is Criminal and must stop !
Asgard / BT have rushed their attempted Adviser Fee forms announcing it October last year to start 1 January this year.
Asgard BDM’s have no idea how their system works, they cannot explain it properly.
Asgard Call Centre staff also cannot answer questions how their Adviser fee system works.
Asgard this week are releasing procedural help guides, they have just developed.
[b]Asgard make each client do 2 Adviser Fee forms – yep 2 forms per product per client both to be signed by client.
So if we have a client couple with both Super and Super Pensions each = 8 Adviser Fee forms for them to sign.
Plus our own FDS Optin = 9 Adviser Fee forms to sign. [/b][b][/b]
What an absolute bureaucratic disaster. Great Job Hayne, Pollies, ASIC and Treasury. You STINK !!!!!!!!!!!!!
Just get the message out there that these ridiculous fees are all part of an incompetent and out of touch government who have little intention of looking after anyone other than themselves.