The Compensation Scheme of Last Resort (CSLR) levy notices arrived quietly in advisers’ inboxes this year, like parking fines for someone else’s car crash. For many, the frustration wasn’t just the cost—it was the dawning realisation that they’re paying for a system designed to fail.
The end of the financial year is here. For many it is a flurry of activity and last-minute scrambling. For financial advisers, this is the time to shine. This is the moment where the strategic foresight and proactive client service can really make a difference to the future financial wellbeing of clients. But in this rush, compliance can never take a back seat.
In September last year, the Australian government fixed a glaring anomaly in the country’s laws, under which Australia had embarrassingly fallen short of global standards in fighting financial crime.
Licensees were given a month to clean up the information they provided to ASIC about adviser qualifications and training. That time is up, and enforcement action is not off the table.
The government’s line on its proposed changes to advice in super is incongruous with the actual changes. You can’t re-do the language embedded in the SIS Act while denying that anything will be different.
It’s an aspect of financial services regulation that was flawed from the outset and has become all but useless over time. The divergence in opinions on how to fix it could give some hint as to why it’s taken so long to address.
ASIC made no secret of its assertion that Lanterne operated purely as a “licensee for hire”, which is an ominous reminder for licensees operating with thin risk and compliance standards that the regulator is watching.
On what was set up as a discussion around the proposals put forward by the Quality of Advice Review, the topic repeatedly shifted to the frustration providers felt at not being able to work with ASIC to bring compliant solutions to market.
Multi-strategy separately managed accounts (SMAs) are “taking off like you wouldn’t believe”, according to SQM Research CEO Louis Christopher, but the rapid increase in their use could also be creating a regulatory blind spot.
While the move to tax superannuation balances above $3 million at a higher rate would affect only a handful of people at first, if the threshold is not indexed to inflation, future generations may be turned off from investing in their super, industry leaders say.
Consumers will be bamboozled by the government’s plan to divide advisers into “experienced” and “relevant” camps, the association explained. That, and the need for a sunset clause, mean the current proposal needs work.
While FoFA was the right policy for its era, Ripoll says the industry has come a long way and has different needs. The Quality of Advice Review’s proposals are an “important step” for today’s industry, he believes.
The wealth management arm of Bell Direct believes the principles-based regulatory system proposed in the advice review will not only facilitate the dissemination of advice, but encourage development of digital models that will facilitate transactional advice.
“I don’t think anyone told me that things are going well,” said Michelle Levy of the advice review consultation process. Despite being given disparate views on how to fix things, the lawyer believes compromise was never an option.
In a letter released by the group Thursday it said “urgent action is needed”, and called the government’s impending response a “rare opportunity to deliver affordable and accessible advice to consumers”.
The percentage of paraplanners that have ambitions to become qualified financial advisers has decreased dramatically, with several key drivers behind the change.
The financial services minister is looking at tackling scammers at the source: “Does our barista down the corner really need my email address, my bank details, my name and my mobile phone number just to buy a cup of coffee?”
Implementing the current proposal for ‘experienced’ advisers to skip the relevant degree mandate will do far more harm than good, the association argues, with both current and future advisers turned off by the plan.
New income thresholds for seniors health cards, downsizer rules, the transfer balance cap, changing work test requirements and the Home Equity Access Scheme are the five most common technical problem areas for advisers in 2022.
