Senator Jane Hume calls a statement released by her office this morning encouraging advisers to submit their feedback to ASIC’s consultation on advice access “a bit of a call to action”.
With only days left until the Monday’s cut off date for submissions, the recently promoted senator says regulators and policymakers are united in working with the advisers on the front line to figure out what workable changes can better facilitate the provision of advice.
ASIC needs to hear the advisers stories, Hume tells Professional Planner. If policymakers and regulators are going to make effective and efficient changes to the rules, they’ll need details from the advisers who ply their trade according to them. They want specifics.
And everything, she adds, is up for debate.
“There is no aspect of change that we wouldn’t be considering,” Hume says. “We need to look at the red tape that exists, but also ask what red tape really means? We want to get far more specific about what that means for industry participants at the coal face.”
Hume was elevated to the role of Minister for Superannuation, Financial Services and the Digital Economy by Prime Minister Scott Morrison in December, which makes a full minister responsible for financial services for the first time since Kelly O’Dwyer finished as the Minister for Revenue and Financial Services in 2018.
The promotion follows a period of high visibility from Hume, who has signalled her office’s intention to streamline advice with several significant changes, including two major announcements on December 14; the disbanding of FASEA with its duties being divided between ASIC’s Financial Services and Credit Panel and Treasury, plus the consolidation of financial disclosure statement and ongoing service agreements.
“From a government perspective there’s a real willingness to work with industry,” she says.
The right pathway
Hume says her office is looking closely at three key issues in the sector, the first being an assessment of the definitions of advice. “I believe the use of the term ‘scaled’ advice in that past has been misleading,” she says, noting that ASIC are considering the terms ‘limited’ or ‘single issue’ advice.
The other issues she’s particularly interested in are the need to reduce red tape and the use of digital technology.
“Everyone agrees those are the three key drivers, it’s just the outcome at the end that we need and making sure we’re not reopening the drawbridge to opportunities for misconduct.”
The spectre of misconduct is something Hume is cautious of, and will need to weigh carefully in any move to reduce red tape. While momentum has swung back towards de-regulation in advice, the horrors of the royal commission are still fresh. Indeed, Hayne’s recommendations are yet to be fully rolled out, stalled as they were by the pandemic. The interplay between consumer protection and industry support is a balancing act, but the Minister hesitates at labelling it that way.
“We don’t want to say it’s a balance because that makes it sound like a trade-off,” she says. “We want good consumer protections and we want a workable framework for the industry. Its not a trade off. You can have both, it’s just a matter of finding a pathway.”
Business as usual
The minister won’t be drawn for comment on recent figures from FASEA that show only 52 per cent of advisers on ASIC’s registry have passed the adviser exam with less than a year to go before the cut-off date. But she does have a stern warning for advisers who think the impending wind-up of FASEA will lead to a watering down of the educational and ethics standards.
“My only concern after we announced the change with FASEA being wound down is that advisers might mistakenly take that as an indication that the education standards will change,” she says. “They will not.”
Every adviser still needs to pass the adviser exam by January 1, 2022, Hume reiterates.
“I don’t want anyone to rest on their laurels,” she says. “Maintenance of consumer protections and improvement of education and ethical standards will continue.”
Thank you Senator Hume for a ‘call to action’ on Friday 15th, before CP332 submissions close Monday 18th. I have made a submission, but I suggest your call to action has come a bit late given the effort required to participate. If you’re an Adviser and Licensee, CP332 is a 26 page questionnaire (~72 questions). It took me more than 6 hours to respond, and I did not answer all the questions.
It is disrespectful to all of us who have made the effort to particpate, and undermining of the CP332 process, that you have already boldy concluded that defining the term scaled advice, reducing red tape and digital technology, “Everyone agrees those are the three key drivers”. CP332 closes this afternoon. It’s not too late for you to have an open mind on what the problems and possible solutions are.
A balancing act is one way of putting it.
An admission that many of Haynes findings in the Royal Commission were wrong and that the main perpetrators have been able to pass the blame to the vast majority of honest advisers who did no wrong, would have been a more positive step in the right direction.
On the one hand, Senator Hume states that reducing red tape is a main priority, then she proceeds to say that the mostly irrelevant FASEA Education requirements, which are one of the biggest exercises in red tape, will stay.
Well Senator, you have just caused thousands of experienced Advisers to say if that is your Governments attitude, then we will not be forced to do, what is a useless and overbearing maze of red tape and we will continue with our plans to exit the Industry.
My Business has been operating for 34 years, we have had a 100 percent success rate with our clients Insurance claims, with NIL client complaints and we have vast experience, yet come the first of January 2021, I will no longer be able to help my clients and continue to guide and advise them.
What was my crime? I refuse to be told that I am not ethically competent because I have not sat an exam that was flawed from day one and that my 34 years experience has no standing, unless I hold more irrelevant bits of paper that has NIL bearing on the advice my Business provides.
The reduction of red tape is so much more than sacking FASEA and keeping all the red tape, it is about a major overhaul of the Life Insurance Framework, which is totally unworkable.
If Senator Hume and the Federal Government want, what they have stated thousands of times, which is cost effective, affordable quality advice for all Australians, then they have made a wrong turn and have the map upside down.
Talk is cheap and people no longer believe what politicians say.
What Australians want, is clear, concise and fair Regulations that will do what they are supposed to do, which is to allow Business to get on with it, without restrictive conditions continually imposed, for little or nil benefit for the people the Regulations are meant to protect.
I will be 59 when I am forced to retire.
I do not need to work, I want to work and continue helping Australians to try and make sense in this confusing world we live in.
Come the first of January 2021, I will stop being stressed and will start living.
Congratulations Senator Hume, my enforced retirement is my gain and like the thousands of other advisers who will no longer be there to help their clients, it will be Australia’s loss.