Addressing the FSC Life Insurance Summit on Wednesday, Jane Hume said the FASEA reforms had “only focused on one piece of the puzzle” when it came to necessary reform in the advice sector.
“FASEA was established in order to implement standards including education requirements, a code of ethics and a program of continuing professional development including an exam that represents a common benchmark across the industry,” Ms Hume said.
“But FASEA only focused on one piece of the puzzle, that was creating standards and maximising the quality of advisers. They didn’t focus on keeping the costs of doing business low or making advice readily accessible to consumers.”
Ms Hume acknowledged that the amount of red tape currently being imposed on advisers “increases costs and takes away time from doing their job”.
“For small businesses, the problem is even more acute — 90 per cent of advisers are sole traders or part of a small business,” she said.
“The government is committed to the professionalism of the advice industry certainly, but we want to make sure that we maintain a balanced approach to achieving this goal.”
Ms Hume said the movement of FASEA’s standards-setting powers into the Treasury, due to take place in January 2022 under draft legislation released earlier this week, would achieve “regulatory alignment” for the sector, while the establishment of a single disciplinary body within ASIC would move the industry closer to a self-regulatory approach.
“The legislation includes the creation of a single disciplinary body for advisers which will be run by industry professionals and administered by ASIC,” she said.
“It’s my hope the passage of this legislation will enable advisers to enforce standards within their own profession in a way that not only meets but surpasses community expectation.”
Why isn’t the profession screaming for all conflicts to be banned.
If we have no conflicts, compliance documents drop away.
We have brought this problem on ourselves, and those advisers not preparing to go down the independent route will be buried by compliance for many years to come.
well said….try being an auditor….welcome to our world of nightmare overkill regulation!!!
I’m one of those advisers over age 60 who has now left the industry. I had been advising for 35 years with no complaints and happy clients. But it’s not feasible to continue. I’m almost enjoying retirement (which I wasn’t quite ready for) but I feel I had so much more to give.
The FARSEA exam should be more than sufficient for them to appease the masses in what has really been an exercise in futility. This whole debacle eventuated because post the Royal Commission, the government needed to be “seen to be doing something”. Sure, they have weeded out a few dodos that should not have been in the industry in the first place but they only accounted for about 10% of the departures. The other 90% were advisers over the age of 60, who were the most knowledgeable and experienced we had. There is no doubt that this was an unintentional consequence that resulted because they didn’t think their actions through properly. The best course of action that they could take now, is to concede that they may have been wrong and then do away with FASEA’s Bridging Course – Ethics and Professionalism (including the FASEA Code of Ethics and Code Monitoring Bodies). This is complete Overkill on their part and will likely result in even more advisers departing the industry. What they fail to grasp is that there is absolutely no correlation between ones level of education and honesty. They can raise the level of education all they want but a crook will always be a crook. For the most part, all that they have achieved is to leave the smart crooks in the industry. Those being the dishonest advisers capable of stealing their client’s money and getting away with it. I bet that bunch all passed the FARSEA exam with flying colours. So please let us hope that they see sense and stop this rot for the sake of everyone.