Advice regulatory model should ‘mirror’ accounting framework: FINSIA

The Financial Services Institute of Australasia (FINSIA) has recommended Treasury consider how a regulatory model of oversight for financial advisers can be evolved and “mirror” the regulatory framework that exists for the accounting profession in Australia.

“Any measure of objective assessment would conclude that a very robust and well-defined coregulatory framework currently exists in respect of the oversight and monitoring of professional accountants in Australia,” the submission reads.

“Professional accountants are widely regarded by both the community, and regulatory agencies, as upholding the highest standards of professional conduct with a high degree of consistency and uniformity when it comes to adherence with standards of conduct and behaviour.”

It continues: “We recommend that work be undertaken by the QOAR Team to explore the features of the coregulatory model that currently exists within the accounting profession, and other similarly structured professions such as lawyers and engineering, to determine if the government believes such a model may serve as a valuable guide for the evolution of the regulatory framework in respect of financial advisers in Australia.”

In considering how this model would exist for financial advice, FINSIA outlined some key issues that would need to be addressed, including to maintain a publicly accessible register of members, periodic audit processes and ensuring a system is put in place that records sanctions and disciplinary action.

“For FINSIA’s part, we certainly would be willing to play an active role in the oversight of our members in the financial advice sector, and we expect that our peer group of professional bodies would also be prepared to play a larger and more expansive role with their members.”

The QAR, to be conducted by Allens Partner Michelle Levy, will be provided to government by 16 December this year.

FINSIA’s QAR submission comes after the group called for action from the incoming Albanese government, saying it wants to work together on a “broad range of financial services policy reform”.

“The financial services industry is the biggest sector of the Australian economy, contributing more than $185 billion to national output each year. The strength of our financial services industry has helped to shield Australia from some of the most challenging economic and market downturns over the past few years, and there is an opportunity to continue to strengthen the sector for the future,” FINSIA CEO and managing director, Yasser El-Ansary, said.

Just a week later, FINSIA announced David Cox as its new president, succeeding Victoria Weekes who stepped down after serving a maximum term.

Mr Cox, who is also a PwC partner, brings over 20 years’ experience to FINSIA, having previously been a member of the Consumer Finance Advisory Group and chair of the Institutional Markets Council.

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.