Advisers need sufficient understanding of Oct reforms

Small licensees and self-licensed advisers need to have a sufficient level of understanding about the five reforms coming into play at the start of October, according to the Association of Financial Advisers (AFA).

AFA general manager for policy and professionalism, Phil Anderson, said the association was appreciative of the fact that the corporate regulator came out to say it would take a “reasonable approach” in the early stages of the reforms provided participants were using their best efforts to comply.

“I think they [The Australian Securities and Investments Commission (ASIC)] are quite aware of how challenging the October launches are going to be. We've had conversations with them about that and we've also expressed our anxiety about it with the Minister [for Financial Services, Senator Jane Hume],” he said.

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“…I think we're not yet at the point where people have really wrapped their minds around everything that has to change in October.”

From 1 October to 5 October, 2021, the reforms to commence included the new breach reporting regime, reference checking changes, design and distribution obligations (DDO), new internal dispute requirements, and the Australian Prudential Regulation Authority (APRA) intervention into the income protection market.

“All of those things are happening within five days, it is going to be a nightmare,” Anderson said.

“We would not be surprised to see some fairly broad issues with lack of awareness, lack of preparedness. I think what ASIC have said is that if people are making an effort, then then they will, in effect, take a facilitative compliance approach. And we would certainly welcome that.

“You’ve got to put this into context – people are still coming to terms with the annual renewal requirements, some of them still have to do the exam so they could be studying as well, and then you've got the overlay of COVID-19.”

While smaller licensees could have access to compliance consulting resources, Anderson said there was only so much they could implement at one point in time along with their primary focus of helping clients.

“The first thing advisers need to have is a sufficient level of understanding of what is changing and they need to be able to prioritise,” he said.

“With DDO, you’d probably start to pay attention to what the product providers are saying and whether they require you to update the distribution agreements. Otherwise, you need to think about it.

“If it's reference checking, for example, then you might respond if you get a request for a reference. But if you're a sole practitioner, and you've been a sole practitioner for years, then you can put that to one side as reference checking is not going to be important. With the income protection, it's about paying attention to the new products as they're released over the course of the next month or so.”

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This is simply further efforts by Josh Frydenberg (ex Bank director) and Jane Hume (ex Big Super fund adviser) to close all independently aligned financial advisers and put all financial advice back with the Big Banks and Big Super funds.
Advisers are being treated with contempt, and the Australian public are being played like fools.
The current Liberals are solely focused on serving Big Business.

They pay the political donations.
All ethical?
No conflict of interest?

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