Better Advice Bill creates individual registration in 2023
The Financial Planning Association of Australia (FPA) has welcomed the Government supporting an individual personal registration system for financial planners, as part of the Government’s Financial Sector Reform – Better Advice Bill 2021 – which was introduced in Parliament today, to improve the accountability and transparency of the financial services sector.
“The Single Disciplinary Body for Financial Planners is an important reform for the profession. Creating a model that requires financial planners to individually register annually with the disciplinary body from 2023 is an important part of the journey to individual professional accountability,” said FPA CEO Dante De Gori CFP®.
The FPA strongly supports a model in which registration is the personal responsibility of each financial planner and is not connected with their employment or authorisation under an AFSL. This was a key recommendation in its submission in May to the Treasury’s consultation on Single Disciplinary Body for Financial Advisers.
The current model, which will come into effect from 1 January 2022, makes the registration of a financial planner the responsibility of their AFSL in year one until the financial adviser register is transferred from ASIC to the ATO in 2023. While the AFSL registering the financial planner in year one is effectively a duplication of the existing authorisation process, this is just a short term solution on the professionalism journey of financial planning and a strong step in the right direction.
The FPA believes improvements to the proposed reform relating to the Tax Practitioners Board (TPB) can be made. Under the Bill, the TPB still has the responsibility for the Corporate Authorised Representative (CARs) and AFSL registrations meaning compliance with TPB regulations is still required.
The current drafting does not meet the Government’s intention of creating a single set of professional standards for financial planners and a single regulatory regime.
“The FPA will continue to advocate for reform that reduces duplication and the rising costs facing financial planners,” said Mr De Gori.
“This is a major reform that has already recognised the need to reduce regulatory costs with the winding up of FASEA and the removal of the redundant registration with the TPB. Further changes are needed to ensure that a duplicate set of regulation and the unnecessary red tape this causes is removed in the profession which will have positive flow-on effects for the affordability of advice.”
Single Disciplinary Body
According to the Bill, ASIC must convene the Financial Services and Credit Panels (FSCP) with all matters referred to the corporate regulator. All appointments to the panel will also be made by ASIC.
“By expanding the FSCP’s functions to perform the role of the single disciplinary body for financial planners, it is crucial for ASIC to evaluate how they can streamline the process of referring matters to FSCP to minimise the cost blow out,” Mr De Gori added.
“The FPA continues to believe that the best outcomes for both financial planners and consumers come about when the Government and the profession work together on the issues that we are facing. This is an extensive piece of legislation and the FPA will continue to work through the details with the Government.”