The Financial Adviser Standards and Ethics Authority (FASEA) should be held more accountable for imposing its standards on financial advisers and is widely seen as a “regulator running amok”, according to the chair of a parliamentary committee.
During a hearing of the House of Representatives Standing Committee on Economics, committee chair Liberal MP Tim Wilson highlighted concerns and complaints among adviser constituents regarding FASEA processes and its perceived lack of accountability when enforcing mandatory standards on the financial services sector.
“I have had so many complaints from constituents about FASEA, their processes, their consultations, and I know many of my colleagues are in exactly the same situation,” Wilson said.
“[There] just seems to be, consistently, a constant frustration with the [FASEA] board and feeling like they can dictate to the financial services industry without any accountability, particularly when they’re introducing mandatory regimes which are pushing around long-term financial advisers who, though they’re quite capable of doing their job, are suddenly being dictated to about the qualifications they need within relatively short time frames.”
In response, FASEA chief executive Stephen Glenfield noted the authority fulfilled its obligations according to the Corporations Act and also consulted widely with a broad range of stakeholders before implementing changes to FASEA standards.
Wilson pointed out many in the financial advice industry believed their views were not being taken into account before mandatory changes were imposed on the sector.
“There’s clearly been a failure of FASEA in terms of engagement with the financial advice sector if there is so much strong feedback directly from financial advisers to members of parliament,” he added.
“[Advisers] feel they have no real capacity to have informed participation in [FASEA’s] decision-making.”
He also suggested FASEA come under the permanent oversight of a parliamentary committee, to which Glenfield said he would have no objection if that were to take place.
Yesterday, FASEA began consulting on its recent proposal to provide advisers with an additional three months to meet their continuing professional development requirements.
Last week, it confirmed the 2020 financial adviser exam would be held in three separate sittings before the end of the year.