Earlier this year, the chief executive officer of the Financial Services Council (FSC) stated that the Australian Securities and Investments Commission (ASIC) extended the registration deadline for self-licensed advisers to evaluate compliance levels, signalling a redirection of attention towards this group.
Blake Briggs told ifa at the time that ASIC is concerned regarding potential non-compliance in self-licensed or micro-licensed advice businesses, attributing the lack of scrutiny in this sector to resource constraints.
As such, the regulator was reported to be planning to utilise the registration obligation as a measure to assess compliance and determine its next steps.
ASIC has now disclosed that as of 29 February, there were 27 individuals authorised by AFS licensees to provide personal advice to retail clients on relevant products without being registered, with the majority operating under small or micro-AFSLs.
Namely, as many as nine were licensed by a licence that had less than two advisers, five came from a licence with three to five advisers, three from a licence with six to 10 advisers, and four from a licence with 11 to 50 advisers. Just six advisers came from an AFSL with over 51 advisers.
ASIC disclosed this data in response to a question on notice asked during February’s session of the economics committee.
The new registration obligation, initially introduced in the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Act 2021, has faced challenges from the outset due to parliamentary delays and the regulator’s technology issues.
Earlier this year, the corporate regulator extended the registration deadline to 16 February, following multiple prior delays of the registration obligation.
Despite issuing warnings about the consequences of failing to register, ASIC has not yet publicised any such punishments.
27 people aren’t registered. Wow, major crisis. Are these people on maternity leave or LWOP or are they genuinely shonky? My guess is most, if not all are either on leave or not providing advice.
I get why ASIC want to close down all single licensed advisers (its too hard for them to control and oversee), but obviously ASIC forget that nearly all of the misbehaviour has come from within the larger AFSL…and from the executives not from the advisers.
The solution is pretty simple – encourage the industry to create large AFSL that don’t have any products for their advisers to sell. Get rid of APL, they are nothing more than a way for AFSL to make money from product providers.
The FSC and their big dealer group backers are petrified of self-licenced financial advisers. This is because their best and most compliant advisers are leaving in droves to set up their own AFSL. They are getting stuck with the lowest common denominator. So if ASIC need to look anywhere, it is the big dealer groups. I highly doubt ASIC would be using the registration process as a test, but if they are, those numbers look pretty good as a percentage of advisers in each category and there could be a perfectly reasonable explanation for the small number not registered.
couldn’t agree more. Just a shame this view/reality is not understood by ASIC as a whole
I think it’s worth noting that financial advisers only need to be registered if they are giving advice. If we have financial advisers on leave, like sick leave or extended leave (like having a baby, overseas holiday, etc) and they remain authorised though are not currently giving advice, then this is a non-event. Maybe this highlights the flexibility in how businesses especially smaller businesses work with their advisers.
The larger question for ASIC here, of the advisers that aren’t registered how many administrative actions are being taken? If the answer is none or very little, then this would suggest that none of these advisers are doing anything wrong.
Ha Ha, ASIC went after the large players with vengeance and now that everyone has worked out its safer to hide under a rock and never come under the eyes of ASIC they have worked out this is a poor outcome for the public.
What about every time I open social media I have a 25 year old buyers agent giving advice on how to borrow upto the eye balls and buy rubbish houses in Newcastle but ASIC wont move on this as property is not a financial product.
Another Storm financial on the way as we are seeing these poor 1st time investors being ripped off yet have zero proetection….shame on ASIC shame.
What about all the shady blokes building dodgy building and ruining people’s life savings
Basically ASIC are saying we should move the way of every industry in Australia that lacks productivity, innovation and competition. That is, make life difficult for small businesses (self-licenced advisers), move them into a few large licensees so that it is easy for the public servants to do their job of monitoring whilst working 3 days per week from home. Then, in 5 years time, the regulator and politicians can complain about the lack of competition in the sector and our productivity problem.
Modern public servant and politician is addicted to regulation, they can’t get enough of it.
Thats always been the case. ASIC would much prefer advisers are licensed by a few large AFSL’s rather than self licensed. Much simpler life for ASIC & their minions.