While the single advice disciplinary body proposal will assist in removing some of the additional layer of complexity, the Government’s consultation draft should not be the final word on establishing a new disciplinary system for financial advisers.
The SMSF Association said the single advice disciplinary body was a critical reform for the advice sector given the complexity around multiple registration, regulatory bodies, and codes.
SMSF Association chief executive, John Maroney, said: “It is an important step in raising standards, providing consistency and simplification with the use a single body – the Financial Services and Credit Panel (FSCP) within ASIC. Its role is to monitor, review and where necessary discipline the sector.
“Over time, the FSCP and associated processes will provide greater consumer protection and, in turn, instil a greater level of confidence in the system’s integrity.
“We urge the Government to reshape some of the proposed measures, using them as the essential first steps towards broader regulatory reform for the advice sector. Doing so will align the financial advice sector with other professions – the broader policy objective.”
Pointing to the individual registration of financial advisers and the inclusion of tax financial advisers sitting under the Australian Securities and Investments Commission (ASIC), Maroney said the registration should be the responsibility of the individual rather than the licensees.
“This makes it clear that these declarations are a statutory obligation and not a requirement of the licensee. For advisers, the lines between licensee policies and the law often become blurred,” he said.
He also noted that urgent consideration was needed for advisers who registered as tax financial advisers based on specific experience with approved professional body memberships.
“Given the Financial Adviser Standards and Ethics Authority [FASEA] education standards must be completed by 1 January, 2026, transitional measures will be required to ensure these advisers can renew their registrations after 1 January, 2022, and continue to provide these services,” he said.