Better Advice Bill Welcomed

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Both the AFA and the FPA have welcomed the passing of the Better Advice Bill.

The FPA says it looks forward to the stability that will follow while the AFA notes it provides greater certainty for advisers, although it also harbours some concerns.

AFA General Manager, Policy and Professionalism, Phil Anderson says his association welcomes the confirmation of the establishment of the Single Disciplinary Body and the extension of the deadline for the FASEA exam.

Phil Anderson…is broadly supportive of the draft regulations that have recently been released for consultation

He says greater certainty on the exam extension is important for those advisers who were awaiting the results of the September exam and others who are preparing for what was to be the final exam in November.

Anderson notes the extension of the deadline means advisers who have made at least two attempts before the end of this year will now have until 30 September 2022 to pass the exam (see: Nine Out of Ten Advisers Pass FASEA Exam to Date).

He adds that the AFA is also broadly supportive of the draft regulations that have recently been released for consultation and believes that these regulations will help to minimise the extent of unnecessary complexity and cost that would have otherwise resulted.

Anderson says this “important” Bill will result in the:

  • Establishment of the Single Disciplinary Body
  • Termination of FASEA
  • Transfer of the oversight of tax (financial) advisers from the Tax Practitioners Board
  • Extension of the deadline for the FASEA Exam until 30 September 2022

However, the AFA continues to harbour some concerns about the legislation, he says.

…This will add unnecessarily to the cost of running the Single Disciplinary Body…

It’s concerned about ASIC being required to investigate minor breaches of the law, “…even if they do not choose to refer them to a Financial Services and Credit Panel. This will add unnecessarily to the cost of running the Single Disciplinary Body, which ultimately financial advisers and their clients will need to pay for.”

“We are also concerned about the complex mechanism for the transition and registration of some tax (financial) advisers under the Tax Practitioners Board.”

Anderson says the AFA will be advocating for both these issues to be reviewed and amended in the medium term and will be calling for these changes as part of the Quality of Advice Review that the Government has committed to running in 2022.

He concludes that the passing of this Bill represents an important milestone, “…as it brings us close to the end of the Royal Commission reform process and will allow the financial advice profession to focus on their important role of advising and supporting clients.”

Streamline regulation, reduce costs

Dante De Gori …there are still outstanding issues that need to be addressed through regulations…

The FPA also welcomed the passing of the bill with its CEO, Dante De Gori, saying that after eight years of constant regulatory change, financial advisers “…now have the opportunity to focus on their clients and on the challenge of providing financial advice to more Australians without the distraction of constant regulatory change.”

He notes that the Bill delivers a number of important measures which  “…will streamline regulation, ultimately reducing costs to the profession and consumers.”

De Gori says the Bill is the last major recommendation from the Hayne Royal Commission related to the provision of financial advice, adding that the past two years has been another period of significant reform that has overhauled the regulation and practice of financial advice in Australia.

“Whilst this legislation now provides a level of clarity as to who regulates financial planners, there are still outstanding issues that need to be addressed through regulations.”

He says the FPA will continue to work through these regulations and engage with members and stakeholders “…to ensure constructive input into the implementation of the reforms, as the Treasury consults on the operation of the FSCP panels at ASIC.”