The Morrison government is introducing further reforms to strengthen the financial advice sector and implement recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Recommendation 2.10 proposed the establishment of a single disciplinary body for financial advisers and that all financial advisers who provide personal financial advice to retail clients be registered.
As such, the Financial Sector Reform (Hayne Royal Commission Response – Better Advice) Bill 2021 will expand the role of the Financial Services and Credit Panel within ASIC to operate as the single disciplinary body for financial advisers; create additional penalties and sanctions for financial advisers who have breached their obligations under the Corporations Act; and introduce a new registration system for financial advisers to improve the accountability and transparency of the financial services sector.
Moreover, FASEA will be wound up and its standard‑making functions moved to be the responsibility of the Treasurer, supported by Treasury, while ASIC will be responsible for administration of the adviser exam. The Treasurer will, however, have the power to extend the cut‑off date for certain existing financial advisers to pass the exam.
In addition, tax (financial) advisers will no longer be regulated by the Tax Practitioners Board but instead will be regulated only under the Corporations Act 2001. This is consistent with the recommendation made by the Tax Practitioners Board Review.
“These reforms will further streamline the number of bodies involved in the oversight of financial advisers, delivering improvements to the regulatory framework for the sector and enhanced access to affordable and quality financial advice for Australians,” Treasurer Josh Frydenberg said.
