MP warns ASIC of its conduct on Better Advice bill

The bill will see the corporate regulator’s existing panel expand and operate as the single disciplinary body for financial advisers.

“This bill is trying to fix up many of the problems that have been faced in the financial advice sector to enable financial advisers to go on and support their clients and customers with confidence, to make sure there are proper mechanisms in place where people who do wrong are held accountable for it,” Tim Wilson said in Parliament on Wednesday.

“The establishment of a single disciplinary body is an incredibly important step in correcting not just some of the problems that arose out of FASEA... but also to consolidate it so that financial advisers have a body they trust and understand they play a critical part in fixing the system.”

However, Mr Wilson conceded he still has some “reservations” about the bill, specifically about ASIC’s role.

“I have ongoing concerns about the operations of ASIC and we hope under its new leadership that it will fulfil its function properly,” he said.

“ASIC needs to make sure that it’s backing financial advisers, not undermining them.”

Mr Wilson noted recent committee hearings last week where industry bodies, including the AFA, reported that increasing costs on regulation ultimately impacts the consumer. 

AFA’s acting chief executive Phil Anderson said that costs spent on enforcement activities totalled less than $10 million two years ago and today equate to around $31 million.

“Increases in costs hurt the capacity for Australians to access financial advice at the stage of life they need [it],” Mr Wilson said.

“Increases to costs of financial advice, in comparison to the capital they’ve saved, eats into the capital they’ve saved to invest for their future.

“ASIC should look very clearly at what its conduct is doing to financial advisers and whether it’s going to have an impact on a number of operators in the system.

“Financial advice is a critical part of making sure that Australians can get ahead and we need to make sure that financial advice is accessible so they can get ahead. Because we don’t want a system that entrenches the few and the privileged who can afford to pay high up-front costs.”

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.