AFA: Sweating the small stuff too costly for the SDB

The Association of Financial Advisers has expressed concern over the scope to be policed by the proposed Single Disciplinary Body, noting that if the SDB is forced to monitor and investigate the minutiae of discretions across law, FASEA and its Code of Ethics, costs will blow out and trickle down to advisers.

In a submission to Treasury in response to the exposure draft legislation on the SDB, the AFA expressed “particular concern” that the bill’s exposure draft document will see the SDB looking at “the most minor and administrative matters”.

“This is as a result of the draft legislation suggesting that the SDB will look at all breaches of the law and breaches of the FASEA standards and Code of Ethics,” the AFA stated.

“This will mean that the SDB will be looking at a large number of matters, most of which are minor or administrative, like inadequate record-keeping on compliance with the Best Interests Duty Safe Harbour steps or errors or delays in the provision of Fee Disclosure Statements.”

The associated cost with this palette of work, the association says, will likely increase an already-high industry levy cost for advisers.

“As a direct result, we are very concerned about the cost of running this system, particularly in the context of the recent substantial increases in the ASIC Funding Levy,” the AFA added, noting that advisers are also due to be hit with a new ASIC registration fee.