The government will introduce individual registration of advisers as part of its ‘Better Advice’ Bill, introduced yesterday to parliament as part of the response to the Hayne royal commission and the broader financial services reform regime.
The Bill, which formalises the industry’s single disciplinary body (SDB) within ASIC, will see advisers register under a two stage process.
The first of these stages will commence after January 1, 2022 and require licensees to register adviser representatives on ASIC’s financial adviser register in a “one-off” process.
The next stage will see the responsibility for registration shift to advisers themselves.
“The commencement of Stage 2 registration coincides with the delivery of the new Australian Business Registry Service administered by the Australian Taxation Office,” the Bill’s explanatory memorandum states. “This stage requires eligible individuals to apply to the Registrar to register themselves and renew their registration annually.”
The move to have advisers graduate to individual registration for the SDB is a small but significant step in what some see as a growing movement towards swapping out the current AFSL licensing system for an individual licensing system for advisers.
The Australian Law Reform Commission’s ongoing review into the regulation, which could see Chapter seven taken out of the Corporations Act, is seen as a likely precursor to such a move.
Individual adviser registration has been promoted by the Financial Planning Association for a number of years. The FPA welcomed the Bill Friday morning, with CEO Dante De Gori calling the decision to make advisers sign up to the SDB individually “an important part of the journey to individual professional accountability”.
The FPA acknowledged the move was only a “short term solution on the professionalism journey”, but called it a “strong step in the right direction”.