Five weeks after the Single Disciplinary Body era began, the industry panel members that will deliberate sanctions for advisers have yet to be announced, with both ASIC and Treasury waiting on the financial services minister, Jane Hume, to complete the Financial Services and Credit Panel appointments.
The Government finally wrested control of the advice disciplinary function after pandemic delays, an ineffective period of licensee policing and the ultimate demise of FASEA last year, with the ‘peer review’ setup staring on January 1. ASIC’s website, however, still shows the same 16 FSCP ‘pool’ members that were released in July to make way for the new cohort.
These representatives will eventually sit down with ASIC to adjudicate on matters where the regulator doesn’t think a banning order is warranted, but “reasonably believes” an adviser has breached the Corporations Act.
Yet five weeks after the regime began, no one knows who they are.
ASIC remains in the dark, despite being set to house and operate the panel, with a source at the regulator saying it had “no say in it”, and would update the website when it had more details.
(Worth nothing was the clear frustration of ASIC commissioner Danielle Press in October last year when she said she still had no idea when panels would need to be convened.)
Treasury’s hands are similarly tied, with a representative at its media unit pointing out that job lies with Hume’s office.
“Appointments to the FSCP pool, and their timing, are a decision for the minister and the government, consistent with the experience and knowledge requirements set out in the legislation and the established process for making significant Government appointments,” Treasury stated.
The minister’s office did not respond for comment.
Clearing the mudmap
Replacing the original idea for adviser discipline – a code monitoring body – with a Single Disciplinary Body as per recommendation 2.10 from the Hayne royal commission was originally announced by Hume at Professional Planner‘s Licensee Summit in June 2020.
Hume called the peer review process “a part of the journey to becoming a profession” when the bill cementing the reform passed in October last year.
It was also promoted as a significant move to reduce regulatory oversight, along with the closure of FASEA and changes to Tax Practitioner Board requirements.
“When I first walked into this job the very first thing the industry bodies did was show me a mudmap of all the regulators that had their eyes on advisers,” Hume added. “It’s great to not only deliver the Hayne recommendations but also unwind some of that oversight.”
Right people, right intent
In Hume’s defence, the tardy implementation of the SDB is largely due to the pandemic, which saw other priorities push the bill’s passage back more than six months.
By the time the bill passed, the minister’s office had just shy of 10 weeks to finalise panel members for the FSCP. This also included the Christmas holiday period.
While the panel members haven’t been announced, Hume previously told Professional Planner the FSCP member drive was already underway and that it could take some time.
“We’ve already started looking into that,” Hume said in October, referring to new member appointments. “It will be done over the next couple of months, we’ll be making sure we have the right number of people to draw on for the panels.”
According to Annick Donat, chief executive at Clime Investment Management, picking the right panel members is more important than rushing to meet the legislative deadline.
“I want Government and Treasury to choose the right people with the right intent,” Donat says.
Lack of surety
The absence of nominated FSCP members is unlikely to cause too much concern yet, given the amount of time it would take for an adviser breach to reach the panel hearing stage.
As the wait drags on, however, the lack of surety could become an issue.
“There’s a pipeline in order to get an issue to the panel… but it might be an issue for consumer confidence,” says Mark Bland, partner at law firm Mills Oakley.
“These [disciplinary] processes are really stressful for an adviser as it puts their lives and livelihoods on hold,” Bland continues. “So its concerning if delays in appointments could cause delays in the functions its supposed to perform.”
According to Simon Carrodus, partner at The Fold Legal, a further concern is that several pieces of regulatory guidance are also on the waitlist including protocols relating to how the FSCP will operate, the Code of Ethics and the education carve-out for experienced advisers.
“My assumption is that there is a lot going on in the background,” he says.
