The Government will target a principles-based regulation framework and remove prescriptive checklists like the safe harbour provision for the best interest duty if it is re-elected, says Senator Jane Hume.
Speaking at the AIA Adviser Summit 2022, Senator Jane Hume, minister for superannuation, financial services and the digital economy, said the Quality of Advice Bill would go back to basics by identifying opportunities to simplify regulatory compliance, reduce costs and remove duplication.
“The regulatory environment has truly become a Gordian knot so now we’re stepping back and untangling that knot,” said Hume.
“We want to make sure that the regulatory framework could better enable the provision of high quality accessible and affordable financial advice for retail investors.”
Other than replacing the prescriptive rules based framework with a simplified principle-based framework, as had been suggested by commentators, Hume said the Government would look at simplifying education standards and disclosure as well as documentation requirements.
“Statements of Advice should be more helpful for consumers and less expensive for advisers to prepare,” said Hume.
“The Government intends to rebalance the regulation industry and ensure that standards are practical as well as professional.
“This includes simplifying minimum education requirements to ensure high quality financial advice is available to consumers, and this will achieve the intention of the FASEA reform but without micro-managing advisers, or universities or students and businesses.”
She said it was no secret that the pipeline for new advisers was thin with only a few hundred entrants completing their Professional Year in 2021.
“The sunk cost, the investment in time and in money and the pressure that we're putting on young people straight out of school is simply too much.
“So we want to consider taking a more simplified and sensible approach. The government is ensuring that consumers can expect a high quality of professional advisers certainly, and all new entrants must have a relevant degree.
“But we want to increase the size of the pool that businesses can select new advisers from, and for experienced advisers, we want to recognise the value of that experience.”