The Treasurer and the Assistant Minister for Superannuation, Financial Services and Financial Technology have issued a joint media release announcing changes to the regulatory framework that applies to financial advisers.
Findings of the recent Retirement Income Review showed that most Australians do not access financial advice at retirement due largely to the cost of advice and a lack of consumer trust.
Coupled with recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry which called for a single, central disciplinary body to be established for financial advisers, the Government has announced the following.
- The operation of the Financial Services and Credit Panel (FSCP) within ASIC will be expanded. It will become the single, central disciplinary body for financial advisers. It currently supports ASIC in the exercise of its regulatory functions with respect to the making of banning orders against individuals for misconduct and will be able to leverage its extensive expertise and existing governance structures, avoiding the need to establish a new body to perform the expanded role.
- The Financial Adviser Standards and Ethics Authority’s (FASEA) standard-making functions will be moved to Treasury, with standards to be set by legislative instrument. The remaining elements of FASEA’s role, including administering the adviser examination, will be incorporated into the FSCP’s expanded mandate. FASEA will be wound up as the reforms will streamline the number of bodies involved in the oversight of financial advisers.
The Government said that legislation implementing these reforms will be introduced into Parliament in the first half of 2021.
The release also references changes contained in the Financial Sector Reform (Hayne Royal Commission Response No 2) Bill 2020, which was recently introduced into the House of Reps.
This article was originally published in Thomson Reuters’ Weekly Tax Bulletin.