Advisers being hit with ‘never-ending list of contradictory requirements’: FPA

In its submission to the Australian Law Reform Commission’s (ALRC) Review of the Legislative Framework for Corporations and Financial Services Regulation, the association said it supports proposals to make financial advice law and regulation simpler through a consolidated “rules book”, but highlighted the challenges planners are constantly faced with.

“The financial planning profession doesn't need more regulation, it needs better regulation,” FPA CEO Sarah Abood said in the submission.

“Financial planners are required to interpret a never-ending list of contradictory requirements placed on them. To ensure compliance, planners are required to comply with four laws regulated by eight regulators with additional oversight from Australian Financial Services Licensees and professional associations and additional consumer complaint mechanisms through two ombudsman services and the courts.

“This all comes at the cost of providing clear, concise, efficient and affordable advice to ordinary Australians who need it most.”

Ms Abood said this also creates concern for advisers as compliance requirements under one Act and regulator can differ from others leaving them at risk of breaches.

She added that the complexity with financial services law is also confusing for consumers to understand and therefore trust and engage with the sector.

“Broadly, the FPA agrees with the proposed structural amendments suggested by the ALRC which are intended to reduce complexity in corporations and financial services legislation,” Ms Abood said.

“We strongly believe that the language and structure of the Corporations Act must be improved to allow everyone – including consumers – to better engage with the financial services sector.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.