{"id":46742,"date":"2019-10-14T09:09:27","date_gmt":"2019-10-13T23:09:27","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=46742"},"modified":"2019-10-14T16:19:03","modified_gmt":"2019-10-14T06:19:03","slug":"government-accelerates-new-financial-adviser-disciplinary-system","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2019\/10\/14\/government-accelerates-new-financial-adviser-disciplinary-system\/","title":{"rendered":"Government Confirms New Financial Adviser Disciplinary System"},"content":{"rendered":"

The Government has announced it is accelerating the establishment of a new disciplinary system and single disciplinary body for financial advisers, as recommended by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.<\/span><\/p>\n

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AFA CEO, Philip Kewin …Code Monitoring Australia has withdrawn its application<\/span><\/figcaption><\/figure>\n

The new body is set to be established in early 2021, subject to the passage of legislation which will be introduced into the Parliament next year.<\/span><\/p>\n

The Government stated the \u2018long term sustainable solution\u2019 will take the place of code monitoring bodies due to be established by industry associations, which included the AFA and FPA, under professional standards reforms (see: Joint Code Monitoring Proposition\u2026<\/a>). <\/span><\/p>\n

Financial advisers will be expected to meet the Code of Ethics\u2019 standards from 1 January 2020, from which it will be applied by law.<\/span><\/p>\n

Australian Financial Services Licensees will also be required to take reasonable steps to ensure their representatives comply with the code, and if they do not then ASIC will be able to take action against those licensees.<\/span><\/p>\n

It also said the regulator is considering the steps it needs to take to ensure that licensees do not breach the law by not registering advisers with a code monitoring body and will provide an update shortly.<\/span><\/p>\n

\u201cRestoring trust in Australia\u2019s financial system is part of our plan for a stronger economy.\u201d<\/span><\/h6>\n

The Government thanked the professional associations and the time and resources that had been undertaken towards implementing code monitoring by the end of 2019.<\/span><\/p>\n

\u201cTreasury will immediately begin engaging with these associations, consumer representatives and other stakeholders to consult on the new system,\u201d it stated. <\/span><\/p>\n

\u201cRoundtables will be held later this year to consider policy design and how to best transition to the new system,\u201d it added, confirming that these changes will not impact clients who seek access to redress through the Australian Financial Complaints Authority.<\/span><\/p>\n

\u201cRestoring trust in Australia\u2019s financial system is part of our plan for a stronger economy,\u201d it stated.<\/span><\/p>\n

Responding to the announcement, the Association of Financial Advisers Chief Executive, Philip Kewin<\/strong>, says the join<\/span>t bodies representing Code Monitoring Australia have decided to withdraw CMA’s application, despite satisfying ASIC\u2019s requirements and receiving in-principle approval.<\/span><\/p>\n

\u201cGiven the Government’s intent to introduce the single body in such a short timeframe, we felt it was important to avoid uncertainty and unnecessary duplication of costs,\u201d Kewin explained.<\/span><\/p>\n

\u201cFinancial advisers and their clients have been subjected to enormous demands and uncertainty. We need to avoid adding complexity, further duplication and cost to the regulation of financial advice.\u201d<\/span><\/p>\n

“We need to avoid adding complexity, further duplication and cost to the regulation of financial advice.\u201d<\/span><\/h6>\n

He noted that the AFA aims to work closely with the Government during the consultation and design process that will run into 2020.<\/span><\/p>\n

In a joint response on behalf of Code Monitoring Australia, the heads of the six associations for financial advisers expressed disappointment in the timing of the Government\u2019s decision to not proceed with code monitoring, particularly as there is one month until all financial advisers are due to have registered.<\/span><\/p>\n

The associations said: \u201cGiven the work that has been undertaken and costs incurred in good\u00a0<\/span>faith, we are disappointed that Code Monitoring Australia won\u2019t proceed. We offered an\u00a0<\/span>effective disciplinary model which met ASIC\u2019s requirements and was ready to go on 1 January 2020.<\/span><\/p>\n

\u201cWe are committed to ensuring that appropriate disciplinary procedures and consumer protections are in place, but are disappointed that the announcement is so late in the\u00a0<\/span>development process.<\/span><\/p>\n

However, they added: \u201cWe remain committed to working with the Government to ensure the enforcement of the FASEA Code of Ethics, which protects consumers and promotes high standards among financial advisers.\u201d<\/span><\/p>\n

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Banking Royal Commission Recommendation 2.10, on which the Government has shaped its decision regarding the establishment of a central disciplinary body for financial advisers…<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"

The Government has announced it is accelerating the establishment of a new disciplinary system and single disciplinary body for financial advisers, as recommended by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.<\/p>\n","protected":false},"author":20,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,8],"tags":[],"class_list":["post-46742","post","type-post","status-publish","format-standard","category-associations","category-compliance-regulation"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/46742","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/20"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=46742"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/46742\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=46742"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=46742"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=46742"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}