The Association of Financial Advisers (AFA) is pleased the Government has heeded calls for increased funding for the Australian Securities and Investments Commission (ASIC).
AFA CEO Brad Fox said increased funding, if used wisely, will lead to more effective monitoring and supervision of financial advice increasing the level of consumer trust in the profession.
“It is only a small number of financial advisers who have tarnished trust in our profession,” he said. “ASIC has an important job to do, as do associations like ours, to identify those advisers, licensees and institutions that are not meeting the very high standards required of them under the law and our own professional standards code. The momentum to improve the public perception and understanding of financial advice is well underway and we support the increased government funding of ASIC in this regard.”
The AFA is more cautious about the detail of the ‘user-pays’ model to be implemented from 1 July 2017. “The proposal for ASIC’s costs to be recovered from all sectors of financial services is appropriate in theory, however the detail will be exceptionally important,” Mr Fox said. “The benefits in financial, relationship and total wellbeing for those that receive financial advice are beginning to be understood by the community. So, the cost impacts of this model need to be considered in light of accessibility and affordability of financial advice, as well as upon competition in the market place between institutionally owned financial advice and advice provided by a local community small business financial adviser.”
The application across digitally enabled advice also needs to be considered. The AFA will be considering the detail of the proposal.
