The transfer of the Financial Adviser Standards and Ethics Authority’s (FASEA) functions back under federal government control represented a return to the “will of the people” and a restoration of parliamentary authority, according to a senior minister.
Superannuation, Financial Services and the Digital Economy Minister Jane Hume said while FASEA was tasked with setting up educational and professional standards, plans to transfer those functions and roll them into Treasury and ASIC placed the education and professional standards regime back under the authority of the government and parliament.
“FASEA did a job that no one else wanted to do. Starting that process of reform was always going to be difficult,” Senator Hume said during a presentation at the Stockbrokers and Financial Advisers Association 2021 Conference in Sydney today.
“I’m firmly of the view while it’s important that the regulatory settings remain responsive, they must [be] responsive to the will of the people, as expressed through the parliament and their elected representatives, rather than being vested into the hands of unelected officials who aren’t accountable to the Australian people.
“That is why in December the government announced the responsibility for standard setting would be transferred to government. In future, standards will be set by regulation issued by the minister and subject to parliamentary oversight and potential disallowance and that’s as it should be –parliamentary sovereignty restored.
“It’s important to recognise that FASEA was mandated to focus on just one piece of the puzzle and that was creating standards to maximise the quality of advisers.
“They didn’t focus on keeping the cost of doing business low or making financial advice readily available and accessible to consumers.”
Hume said the FASEA exam was a difficult regime and the government was aiming to reduce the duplication of regulation to lower costs, but confirmed there will be no further extensions or variations for specialists such as stockbrokers.
“I know that the FASEA exam can feel very one-size-fits-all and many of you have expressed that view to me,” she said.
“What the exam does is create a baseline level of knowledge and underlying principles that can be expected from any financial adviser.
“Now in a world where stockbrokers call themselves financial advisers, stockbrokers need to be able to live up to this standard that that designation entails.”
