The government has submitted for consultation exposure draft regulations for the Better Advice Bill. The bill was passed in the House in early August and is expected to go into effect on 1 January 2022.
Amongst its proposed changes are plans to transfer functions from the Financial Adviser Standards and Ethics Authority (FASEA) to the government and have the Australian Securities and Investments Commission (ASIC) oversee the administration of financial adviser exams. As per recommendations of the Independent Review of Tax Practitioners Board (TPB), a new body will also be created to manage the registration and disciplinary measures for financial advisers that advise on tax matters.
According to Financial Services minister, Jane Hume, this change will help to better streamline the regulation of financial advisers and deliver improvements to the regulatory framework. She highlighted confusion over the many oversight bodies in the sector and that the bill would allow for correcting this issue and cutting red tape for advisers.
She added that some criteria would be set to determine when disciplinary matters being handled by ASIC would be escalated to the new disciplinary body, ensuring a more effective system in identifying and addressing misconduct. She also noted that to ensure public transparency and consumer protection, the bill would specify which administrative sanctions imposed on offending financial advisers would be included in the Financial Advisers Register.
Hume said that with the reforms, advisers would be better able to focus on giving financial advice and consumers could better rely on the affordable, quality advice being given. She added that even with the advent of new technologies like robo-advisers, digital advice could not replace the real thing. It could only be expected to support.
In support of her comments, ASIC chair Joseph Longo added that despite the growing trend of social media financial influencers, or ‘finfluencers’, there was a need to differentiate between opinion and good quality advice. He said that ASIC would seek to engage with the industry to find ways of better meeting the affordable need for advice by consumers.
The government has also proposed an extension to the deadline for completing the financial adviser exams that will be pushed to 30 September 2022. This will apply to financial advisers who have already attempted the exam twice by 31 December 2021. The bill will also propose new fees for the exam and registration of advisers that will take effect from 1 January 2022.
Stakeholders that wish to comment on these proposals are to submit their views by 15 October 2021.
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