The federal government’s plans to wind-up the Financial Adviser Standards and Ethics Authority (FASEA) and roll over its functions to Treasury and the Australian Securities and Investments Commission (ASIC) have been universally welcomed by a range of representative bodies.
Each of the bodies stated the transition of FASEA’s education, training and ethical standards work to Treasury and its disciplinary oversight to ASIC was consistent with the need to reduce regulatory supervision of the financial advice sector.
SMSF Association chief executive John Maroney said the body was putting its weight behind the government’s decision to streamline the number of financial advice industry regulators.
“The association has long held the position that financial advice industry regulation needs to be streamlined to reduce unnecessary complexity and this reform meets this objective,” Maroney said.
“The current regime sees advisers having duplicate obligations, multiple regulators and multiple standards that result in unnecessary complexity and cost.
“We see this initiative as further strengthening the oversight of financial advisers, while at the same time simplifying the regulatory framework governing the provision of financial advice.”
The Association of Financial Advisers (AFA) and Financial Planning Association (FPA) also noted the reduction in regulatory oversight and burdens the wind-up of FASEA would provide, but reminded members they still had to achieve the standards set by the authority.
AFA chief executive Philip Kewin said: “Advisers will still need to pass the FASEA exam by the end of 2021 and achieve the education standard by the end of 2025. We expect further news in relation to the FASEA Code of Ethics.”
FPA chief executive Dante De Gori said a timeline for the change had not been provided, but it was likely to take place by the end of the 2021 financial year when FASEA’s funding is due to run out.
De Gori also noted there would be no change to the standards and obligations in relation to financial planners and the law still requires completion of the exam, meeting the education standards and adherence to the ethics code.
Chartered Accountants Australia and New Zealand (CAANZ) and the Stockbrokers and Financial Advisers Association (SAFAA) pointed out the government’s decision elevated the role ASIC would play in the education, training and oversight of financial advisers.
CAANZ financial advice leader Bronny Speed said the announcement meant ASIC would be tasked with steering a path to the future for the advice sector.
“This means it has never been more important for our members to highlight their pain points to ASIC as it starts to shape the future for financial advisers,” Speed said.
Pointing to the recently released ASIC Consultation Paper 332 related to limited advice, she said the regulator wanted to engage directly with advice practitioners.
“Following our numerous government submissions, meetings with ministers and advocacy to regulators, this is an opportunity for members to drive further change so that more Australians can afford personal financial advice,” she said.
SAFAA chief executive Judith Fox said: “ASIC has significant experience in monitoring misconduct through its regulatory oversight of licensees. It makes sense to have the discipline of financial advisers align with the discipline of licensees.”
