Another step forward for the simplification of advice regulation
The Federal Government has quietly passed several previously flagged changes to the financial advice industry. The majority appear to be a positive step in the face of what is a jungle of red tape currently faced by the shrinking cohort of financial advisers.
There were four key changes, with all eyes on the potential for a move from licensees needing to register advisers, to advisers being responsible for their own registration.
The first change was confirmation that the Financial Services and Credit Panel within ASIC would finally become the “single disciplinary body” flagged in the Royal Commission. The intention of this being to “ensure that less serious misconduct does not go unaddressed” and ultimately open-up a broader range of actions to ASIC beyond the banning of advisers.
The second change follows on from this, being the introduction of ASIC’s ability to reprimand, seek enforceable undertakings or issue infringement notices for any breaches of the Corporations Act.
One of the most significant areas of simplification was the registration of Tax Financial Advisers with both the Tax Practitioners Board and ASIC. The legislation will remove the need to be registered with both and move regulation and regulation solely to ASIC’s purview.
As highlighted throughout the week, FASEA is being formally disbanded with the standards- and exam-setting roles being moved over to ASIC. In a positive news for those advisers struggling to pass the Ethics exam, the deadline will be extended unto 30 September 2022 but only for those who have sat and failed the exam twice before the end of 2021.
The final and less expected change was the bill paving the way for the individual, rather than licensee, registration of advisers. According to the FPA, this is set to begin from 2023 once the Financial Adviser Register has been shifted to the Australian Tax Office. They also note that for the immediate future advisers will need to be registered with the single disciplinary body by their AFSL.