Moves by the federal government to absorb the functions of the Financial Adviser Standards and Ethics Authority (FASEA) into other bodies showed it had lost control of the organisation and its task of setting standards for the financial advice sector, the opposition has said.
Opposition financial services and superannuation spokesman Stephen Jones said while the financial advice industry would continue to need professional education standards and qualifications, FASEA had caused enormous damage to the sector.
“I think there is always a role for continuing professional education and continuing qualifications, but the qualifications, the testing, the retesting has got to be relevant to the calling [of the adviser],” Jones said at the recent Stockbrokers and Financial Advisers Association 2021 Hybrid Conference.
“Let’s not lose sight of what this is all about. The government’s inflexibility in setting professional standards, the way they’ve set up FASEA inappropriately, recognising your industry’s qualifications or failing to recognise your industry’s qualifications and experience has done enormous damage to the profession and the industry.”
Speaking at the conference a day before Jones, Superannuation, Financial Services and the Digital Economy Minister Jane Hume said the transfer of FASEA back to the government was a “return to parliamentary authority away from unelected officials”.
Jones, however, told selfmanagedsuper this statement was an implicit admission the government had made an error in its handling of FASEA and its work.
“The fact that the government had to ditch it and drag it back inside Treasury is evidence enough that their eye was not on the ball and the hot mess that was FASEA was left unattended until it was too late, until the life insurance industry started going nuts over it, and that they did not pay attention to it,” he said.
“Now they are working against deadlines and trying to unwind the mess that occurred on their own watch.”
He said while the concerns around the structure and functions of FASEA could be resolved, he questioned at what extra cost, noting the damage was already evident throughout the financial planning industry with high numbers of people having exited.
“What is the evil that you are attempting to address? What is the malady that needs to be fixed? That should be the starting point,” he noted.
“We want a highly professional, well-trained, regulated profession, but we also need to acknowledge that stockbrokers don’t sell life insurance, so let’s train people, test them and regulate them for the job they are doing, not the job you might imagine they are doing.”