The corporate regulator’s heavy hand is stifling the provision of advice, says experienced adviser Deborah Kent, and while ASIC’s intentions are good the manner in which it regulates the industry is precluding the adviser workforce from effectively doing its job.

Speaking on a panel at the SMSF Association’s National Conference in Adelaide this week, Kent railed against the constant pressure being put on advisers by the regulator.

Regulation is the toughest pain point advisers have to manage, she said, but the regulator is seemingly blind to the damage it’s causing.

“Obviously us advisers know about it [and] licensees know about it,” Kent told the audience during a panel discussion on retirement advice. “Regulators don’t because they don’t understand and they’ll never understand. It doesn’t matter how much we sit in front of them and explain what we do, they just don’t see it that way.”

Kent is the founder and principal at Integra Financial Services in Sydney. She is an ex-director of the Association of Financial Advisers and served as a director at FASEA until its cessation in January.

ASIC’s regulatory work is designed with consumer protection in mind, Kent explained, which is appropriate. But that protectionist view becomes a hindrance if it isn’t holistic, if it doesn’t balance the needs of clients with an efficient, functioning marketplace designed to facilitate advice provision.

“Regulators and government just look at protection of the consumer and I understand that,” she said. “We need to protect the consumer and we need to ensure that the person getting the advice understands the advice they’re getting, that it’s in their best interests and they can happily sign off on it.

“But the problem is we put all these layers of compliance over it, so much protection against the client having a go at the licensee that we’ve just taken it too far, it just keeps getting bigger and bigger and bigger.”

ASIC has indicated an awareness that its regulatory work is hindering advice provision, with its research on access to affordable advice identifying “overhead and fixed costs” as a major contributor to the cost of advice, along with statement of advice preparation and rising governance costs.

Over-regulation is an area set to be tackled at the impending Quality of Advice Review in the back half 2022, while the Australian Law Reform Commission is in the middle of reassessing the “overly complex nature” of the Corporations Act, and may pull Chapter 7 – which deals with financial products and services – out altogether.

Yet the regulator has also pushed back at “conservative” licensees, who ASIC believes put overly restrictive compliance parameters on advisers – especially with regards to scaled advice provision.

That interplay between ASIC, licensees and compliance leaders is suffocating the dwindling adviser workforce, Kent believes.

“I feel that we’re under a lot of pressure,” she said. “I know that the advice community is under a lot of pressure to provide quality advice and then we have compliance people who interpret the rules, and everyone interprets them differently so we have no consistent interpretation.”

Policymakers and regulators need to acknowledge how far the industry has come, she argued, and treat advisers like the trusted professionals consumers see them as.