AFA welcomes Better Advice Bill but still harbours concerns

The Association of Financial Advisers (AFA) welcomes the passing yesterday of the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Bill 2021 (the Bill), which provides greater certainty for advisers, but also harbours some concerns.

AFA General Manager, Policy and Professionalism, Phil Anderson says, “We welcome confirmation of the establishment of the Single Disciplinary Body and the extension of the deadline for the FASEA exam.

“Greater certainty on the exam extension is important for those advisers who are awaiting the results of the September exam, and others who are preparing for what was to be the final exam in November.”

The extension of the deadline means advisers who have made at least two attempts before the end of this year will now have until 30 September 2022 to pass the exam.

The AFA is also broadly supportive of the draft regulations that have recently been released for consultation and believes that these regulations will help to minimise the extent of unnecessary complexity and cost that would have otherwise resulted.

This is an important Bill and will result in the:

• establishment of the Single Disciplinary Body (SBD)
• termination of FASEA
• transfer of the oversight of tax (financial) advisers from the Tax Practitioners Board (TPB)
• extension of the deadline for the FASEA Exam until 30 September 2022.

However, the AFA continues to harbour some concerns about the legislation.

“We are concerned about ASIC being required to investigate minor breaches of the law, even if they do not choose to refer them to a Financial Services and Credit Panel. This will add unnecessarily to the cost of running the Single Disciplinary body, which ultimately financial advisers and their clients will need to pay for,” Mr Anderson says.

“We are also concerned about the complex mechanism for the transition and registration of some tax (financial) advisers under the Tax Practitioners Board.”

The AFA will be advocating for both these issues to be reviewed and amended in the medium term.

“We will be calling for these changes as part of the Quality of Advice Review that the Government has committed to running in 2022,” Mr Anderson says.

“The passing of this Bill represents an important milestone, as it brings us close to the end of the Royal Commission reform process and will allow the financial advice profession to focus on their important role of advising and supporting clients.”