The Financial Planning Association (FPA) has used its latest submission to the Australian Law Reform Commission’s (ALRC) Review of the Legislative Framework for Corporations and Financial Services Regulation to call for changes to financial advice regulations to be prioritised to end the duplication of compliance requirements currently applying to financial planners.
“We are keen to see the ALRC prioritising recommendations relating to financial advice in its final report to government and include its considerations for the implementation of its recommendations and proposed legislative hierarchy by government, parliament and regulators,” FPA chief executive Sarah Abood said.
“The proposal is in line with FPA’s long-held position that the legal obligations placed on individual financial planning practitioners should be separated from the requirements that apply to AFS (Australian financial services) licensees and product providers.
“Financial planners are faced with regulatory duplication created by both the structure of the legislative hierarchy and the obligations contained in the financial advice-related provisions. This significantly and negatively impacts the affordability and accessibility of financial advice for consumers.
“This duplication is made worse as the obligations placed on financial planners under the Corporations Act 2001 licensee obligations and the Financial Planners and Advisers Code of Ethics 2019 are heavily influenced by the licensee and others who often then apply additional requirements to financial planners.”
The package of proposals to be put forward by the ALRC is aimed at making the legislation more user-friendly and to eliminate existing duplication in the system via principles-based legislation, scoping order – consolidated exclusions and exemptions, and thematic rule books.
Abood acknowledged the ALRC review is complementary to the Quality of Advice Review as both processes have identified legislative duplication on two fronts, being unnecessary repetition of identical provisions and specific obligations placed on the same provider through multiple applications of ‘like’ obligations, such as the financial advice requirements on financial planners.
She also took time to applaud the ALRC for its continued consultation with the FPA and the greater financial services sector during the review process.
