Single advice disciplinary body ‘critical’ for financial advice sector

In a statement issued on Tuesday, SMSF Association chief executive John Maroney said the move would be a “critical” reform for the financial advice sector.

“We support the policy intent to simplify the regulatory environment for financial advisers. The changes, set to take effect on 1 January 2022, will assist in removing some of the additional layers of complexity around multiple registrations, regulatory bodies and codes,” Mr Maroney said.

“It is an important step in raising standards, providing consistency and simplification with the use of a single body – the Financial Services and Credit Panel (FSCP) within ASIC. Its role is to monitor, review and where necessary discipline the sector.

“Over time, the FSCP and associated processes will provide greater consumer protection and, in turn, instill a greater level of confidence in the system’s integrity.”

Further to this, SMSF argued that the federal government’s consultation draft legislation to implement recommendation 2.10 of the royal commission should not “be the final word” on establishing a new disciplinary system in a submission to Treasury.

“We urge the Government to reshape some of the proposed measures, using them as the essential first steps towards broader regulatory reform for the advice sector,” Mr Maroney said.

“Doing so will align the financial advice sector with other professions – the broader policy objective.

“Individual registration of financial advisers and the inclusion of tax (financial) adviser registrations under one umbrella inside ASIC is one such step. These changes will incorporate a fit and proper person test on application and renewal.

“However, registration should be the responsibility of the individual and not their licensees as the draft legislation proposes.

“This makes it clear that these declarations are a statutory obligation and not a requirement of the licensee. For advisers, the lines between licensee policies and the law often become blurred.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.