The bill will see the corporate regulator’s existing panel expand and operate as the single disciplinary body for financial advisers.
“This bill is trying to fix up many of the problems that have been faced in the financial advice sector to enable financial advisers to go on and support their clients and customers with confidence, to make sure there are proper mechanisms in place where people who do wrong are held accountable for it,” Tim Wilson said in Parliament on Wednesday.
“The establishment of a single disciplinary body is an incredibly important step in correcting not just some of the problems that arose out of FASEA… but also to consolidate it so that financial advisers have a body they trust and understand they play a critical part in fixing the system.”
However, Mr Wilson conceded he still has some “reservations” about the bill, specifically about ASIC’s role.
“I have ongoing concerns about the operations of ASIC and we hope under its new leadership that it will fulfil its function properly,” he said.
“ASIC needs to make sure that it’s backing financial advisers, not undermining them.”
Mr Wilson noted recent committee hearings last week where industry bodies, including the AFA, reported that increasing costs on regulation ultimately impacts the consumer.
AFA’s acting chief executive Phil Anderson said that costs spent on enforcement activities totalled less than $10 million two years ago and today equate to around $31 million.
“Increases in costs hurt the capacity for Australians to access financial advice at the stage of life they need [it],” Mr Wilson said.
“Increases to costs of financial advice, in comparison to the capital they’ve saved, eats into the capital they’ve saved to invest for their future.
“ASIC should look very clearly at what its conduct is doing to financial advisers and whether it’s going to have an impact on a number of operators in the system.
“Financial advice is a critical part of making sure that Australians can get ahead and we need to make sure that financial advice is accessible so they can get ahead. Because we don’t want a system that entrenches the few and the privileged who can afford to pay high up-front costs.”
ASIC’s role is to:
1. maintain, facilitate and improve the performance of the financial system and entities in it
2. promote confident and informed participation by investors and consumers in the financial system
3. administer the law effectively and with minimal procedural requirements
4. receive, process and store, efficiently and quickly, information we receive
5. make information about companies and other bodies available to the public as soon as practicable
take whatever action we can, and which is necessary, to enforce and give effect to the law.
I know ASIC are talking about affordable advice, but this is not in their role description. Maybe this is why they don’t really care about it.
See point 1, “[i]improve the performance of the financial system and entities in it.[/i]” And point 3, “[i]administer the law effectively and with minimal procedural requirements.[/i]”
Perhaps Mr Wilson should speak to some of the Advisers I’ve spoken to who’ve been forced into EUs or even banned for incredibly minor administration differences of opinions – not even breaches, but differences of opinions between undereducated, inexperienced analysts and delegates who like to think they’re subject experts on what to recommend for a client rather than sticking to their job of ensuring rules/regulations are followed.
To give you one recent example – a planner with several decades of experience, zero client complaints and no other issues was banned effectively destroying his career and financial position through legal bills and lost earnings. Why? Because ASIC disagreed with his exclusion of super balances from life insurance sums-insured recommendations despite the fact his methodology was clearly explained and clients understood and were happy with this also.
Meanwhile the companies who pillage millions from consumers have been allowed to continue operating as long as they pay a pittence in fines and allow ASIC to have some newspaper headlines. ASIC aren’t supporting the industry or ensuring it’s stability/continuity.
ASIC aren’t protecting consumers. ASIC are ensuring they paint themselves as victor and bring in money. They’ve created themselves as judge, jury and executioner in one and have destroyed financial services in this country.
Just speak to clients sometime with experience in receiving financial services in other markets – Singapore, HK, Switzerland, US and South America. They are now at a point where they’re refusing to do business in Australia because of the ridiculous process they have to go through even to just buy or sell shares. By the time our paperwork is ready for them to sign off on, it’s 2 weeks later and markets and prices have already moved and they’ve missed out. It’s inefficient and it’s government at its worst.
Its great now that an election is coming up all these LNP people are not happy, not sure, have ongoing concerns about the legislation THEY PASSED.
Maybe they are more worried about their jobs after the next election.
Show some real leadership and scrap the legislation for the crap that it is and i might vote LNP.
‘I have ongoing concerns about the operations of ASIC’ – Mr Wilson, when is your government going to fund the regulator properly?
What! ASIC need more funding do they?
I read it to mean when will they fund it properly (ie no expect advisers to pick up the tab)
ASIC’s actions have all been about increasing regulatory risk for advisers and expenses for clients. Tim Wilson is being very understated and polite.
That is all very true Mr Wilson, but let us not forget that all of this has occurred on your watch.