Better Advice Bill changes enter consultation
Exposure draft legislation for the long-awaited Better Advice Bill was released this week, with advisers gaining greater certainty into the future of the industry.
The legislation marks the end of the Financial Adviser Standards and Ethics Authority, or FASEA, with ASIC itself set to take over from 1 January 2022 when the law is expected to apply.
Leading the headlines from the release was a significant increase in the cost of sitting the FASEA exam, which currently sits at $540 plus GST. Under ASIC, the cost will increase to $948, while the cost of a review of its marking will be $218.
Advisers who have failed the exam twice before 31 December this year will have another nine months to resit the exam, with the extension to 30 September formalised. Similarly, the three-month waiting period will be removed for those who need a resit before the end of 2021.
Among the other key announcements was more certainty around when and for what matters ASIC will be required to convene a Financial Services and Credit Panel (FSCP), being the new Single Disciplinary Body. According to the proposal, this will include when:
- An adviser becomes insolvent under administration;
- An adviser is convicted of fraud;
- An adviser is no longer considered a “fit and proper person” to be providing advice to retail clients;
- The relevant provider had at least twice refused or failed to give effect to a determination made by AFCA;
- Relevant providers have not met training requirements;
- Relevant providers breached the requirements of an SOA as laid out in the Corporations Act;
- They were unregistered and providing advice.
The ‘seriousness’ and referral of any matters continues to rely on the definition that it caused material loss or damage to a client.
The legislation also simplifies the overlap that had occurred with breaches of the Code of Ethics, which themselves require advisers to abide by all relevant laws.
The government notes that “If breaches of the Code of Ethics were included in the breach reporting regime, then all breaches of a financial services law, no matter how minor, would have been reportable by virtue of a breach of the Code of Ethics being a restricted civil penalty provision.”