ASIC Commissioner Danielle Press

ASIC is consulting with the advice industry on a project to lower the cost of advice delivery, or at least determine whether anything can be done outside of changing legislation to help advice delivery to be more easily scaled, an ASIC commissioner has revealed.

“Probably the most critical [thing we are doing] is that we’re engaging with industry to understand the impediments they face in providing affordable and scalable advice to consumers,” ASIC commissioner Danielle Press told a Parliamentary Joint Committee recently.

“We hear a lot that the cost is too high, but we’re not sure where those costs are coming from, so we’re trying to get to the bottom of: Is it a regulatory issue or is it a legislative issue?,” Press said in response to a question from a question by Queensland Senator Bern van Manen.

“Obviously if it’s a legislative issue that will be a matter for government,” Press noted.

However, Press, who is also appearing at Professional Planner’s Best Practice Forum on August 4, went on to note that ASIC is consulting with the industry specifically on about whether guidance is clear enough or whether licensees may be taking a different view to what the regulator is taking within its guidance. This, she said, is where the regulator’s work is currently focused on the matter.

The ability for advisers to provide quality financial advice in a profitable way and within the bounds of expectations of policy makers and regulators has been a topic of discussion since the Hayne royal commission called out the loss-leader advice model and the banks subsequently pulled up stumps on their respective mass-market advice strategies.

“I’ve engaged personally with a number of the groups, and my team is providing a lot of engagement with them to try to make sure we can get good financial advice to clients in a professional way,” Press said to the parliamentary committee late last week.

Extending amnesty on rules relating to Records of Advice and Statement of Advice delivery temporarily introduced since the spread of COVID-19 is understood to be a topic for future consideration by the regulator.

6 comments on “Advice delivery could be cheaper, ASIC investigates”
  1. Avatar

    “We hear a lot that the cost is too high, but we’re not sure where those costs are coming from……”
    Seriously?
    It is mind-numbing, yet telling, to hear these words from an ASIC Commissioner. For the avoidance of doubt Danielle, the costs are largely the result of misguided regulation, and ASIC is one of the principal offenders.
    Aaron Walters’ comments are spot-on.
    Consumers of financial services in Australia are not going to benefit from another ASIC project. They would benefit from some honest self-reflection from ASIC, and from ASIC engaging professional planners in the decision-making process.
    But to be fair and give credit where it is due, I would like to compliment ASIC on their very convincing impression of Inspector Closeau.

  2. Avatar
    Aaron Walters

    “We hear a lot that the cost is too high, but we’re not sure where those costs are coming from, ”

    And here in lies the problem. If you had experience in giving advice, then you’d know.

  3. Avatar
    Chris Papayianis

    Agree with Jeremy and to add…
    the current state of our industry is much like many CRM’s and outdated online portals – the legislation was brought in a time that it was needed and did a fine job at the time. Since that time though the regulations and laws have not been changed but patched and had additions to fit the current scenario and new findings; all this has done is added unnecessary complexity and even contradiction in some situations.
    A complete re-haul is needed to ensure the regulations and legislation are in line with present day advice practices and more importantly client needs.

  4. Avatar

    I agree with Jeremy Wright. If the ASIC leaders can navigate a more efficient system of managing the compliance documentation associated with our business we would spend less time creating large documents that cost a lot and that clients don’t want. Many of my clients find the volume of information confusing and admit to reading only the “Executive Summary”. With less time spent on creating volumes we could actually see more clients and focus on providing useful advice that meets the clients’ needs.

  5. Avatar
    Jeremy Wright

    An increase in costs to provide advice is multi faceted.
    What ASIC and the Government do not understand, is that time is a very real cost and working through the maze of Regulations and trying to incorporate it all into every facet of what Advisers do, is not only time consuming, it is exhausting and has led the Industry to the point of not being able to make decisions without needing to pay Lawyers and Compliance entities, who find it a maze of rich pickings for them to charge outrageous fees to explain rules that are opaque and open to interpretation.
    This is a deliberate strategy, as it allows these entities to have countless discussions at hundreds of dollars an hour to attempt to bring the miasma, to some sort of clarity.
    The meat in the sandwich, as usual, are the people who are at the coal face and between the Regulators and the Lobbyists AKA Lawyers / Compliance interpreters, they have taken control of the Industry and are causing more problems with their inability to simplify and allow Advisers to advise, without fear of retribution.

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