New ASIC chair Joe Longo has asked advisers to match the regulator’s efforts in paving the way for a smoother and more efficient relationship, imploring industry participants to continue promoting the value of advice and adhering to the “spirit” of financial services law.
In a short address to advisers at the Association of Financial Advisers National Conference Tuesday, Longo detailed the work ASIC has been doing to ameliorate the issues facing advisers, including its early pandemic-related compliance reprieves, guidance on Hayne royal commission law reforms, facilitating a reprieve on spiralling adviser levy costs and pushing through amendments to incoming October reforms.
“Last but not least, I recently created a dedicated asset unit to identify and implement changes to how we administer the law, with a focus on minimising regulatory costs for business,” Longo said.
“Now what about you? This has to be a two-way street.”
While ASIC is doing what it can to assist the industry, he explained, it’s a responsibility shared by advisers.
“So I’d like to leave you with three suggestions,” Longo said. “You can continue to focus on the interests of your clients. You can continue to cultivate and advance your industry’s value proposition. You can comply with the spirit of the new laws.”
Longo’s quid pro quo call is an extension of the more accommodative relationship ASIC is keen on cultivating with advisers. The genesis of this new direction was ASIC’s Consultation Paper 332, Promoting access to affordable advice for consumers, where the regulator lent an olive branch to the industry by asking advisers how to bridge the advice gap.
CP332 marked a change in tone from ASIC, and it yielded a record 466 submissions from industry.
Since then, the regulator has incrementally dropped the adversarial approach it adopted during the royal commission, culminating with the abandonment of its ubiquitous – and expensive – ‘why not litigate’ policy this year and the appointment of Longo, who is clear about his intention to work with industry, not against it.
Both policymakers and regulators have signalled their intention to help lift the industry, which is seen as vital to consumers in the wake of the pandemic.
While advisers will appreciate the new direction, they’ll likely find it incongruent with the stack of new reforms – six in total – they’re being asked to comply with in what’s being called “Red October” by compliance experts. Aware of this, ASIC has made seemingly genuine efforts to mitigate the disruption.
“We listened to industry concerns about the law reforms due to commence in the next fortnight, [and] in response we publicly announced that we will take a reasonable approach in the early stages of the reforms,” Longo said, “…provided industry participants use their best efforts to comply.”
Longo knows the October suite of reforms are a significant imposition for advisers, and they are slightly out of step with efforts to make advice more accessible and affordable. But as one of the final tranches of significant reform to come out of the royal commission, they must be implemented.
Next year, with an industry full of exam-qualified advisers and streamlined oversight of the industry, there is hope ASIC will use the scheduled quality of advice review to continue smoothing the gears of advice.