The Association of Financial Advisers has recommended that a panel be set up containing representatives from Treasury, the corporate regulator and industry to work through improvements to advice regulation.
Put forward as a key recommendation in the association’s submission to ASIC’s consultation on promoting access to affordable advice for consumers (CP 322), the recommendation seeks to formalise a more inclusive and consultative relationship between advice industry, regulators and policymakers.
The proposed “cross government and industry panel” would be set up “to work through the myriad of issues at present”, the submission suggests.
Contrary to the narrative that the financial advice industry is trending towards a loosening of regulation, the AFA points out a number of developments that made operating in the industry more burdensome in 2020. These include additional BID compliance steps, ASIC’s ongoing ‘lookback’ project, the monitoring of grandfathered commissions removal, a reduction in complaint handling timeframes and record keeping obligations for incoming design and distribution rules.
“Whilst it is seemingly accepted that more needs to be done to reduce the level of red tape in the financial advice sector, either through actions by ASIC, or through new legislation, the requirements for financial advice licensees and their advisers have increased substantially in recent times,” the submissions states.
“This is only some of the recent developments, which have all been happening at the same time that licensees and financial advisers have been coming to terms with the requirements of the 2017 Professional Standards legislation and Life Insurance Framework reforms,” it continues.
While not expanding on the proposed working group, the AFA made it clear such a body would keep track of regulatory developments and provide a touchpoint for industry consultation on a regular basis.
“Financial advice is a sector under intense pressure at present, as is reflected by the points above and the significant decline in adviser numbers over the last [two] years,” the AFA states. “There is no indication that the impact of these changes has stabilised, and further substantial declines are expected.”