Is the ASIC affordable advice review just the first step?

The Federal Government may have to treat the current Australian Securities and Investments Commission (ASIC) affordable advice review as just a precursor to a broader, independent review of the legislative and regulatory environment covering financial planning.

And, in part, that is because ASIC is arguably a stakeholder in the process rather than an objective, independent party.

As industry submissions continued to flow into ASIC review this week, Association of Financial Advisers (AFA) general manager, policy and professionalism, Phil Anderson said he believed that the ASIC review “could only achieve so much”.

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“Taking the lead and trying to fix many of the issues raised in terms of legislation and regulation will require much, much more,” he said.

Anderson’s sentiments were echoed by former dealer group chief executive, Paul Harding-Davis who said he believed that while the ASIC review would likely succeed in identifying many of the key issues driving up costs in the financial planning arena, ASIC would struggle to objectively suggest to remedies to the Government.

A common theme emerging across all of the submissions so far filed with the ASIC review has been the time and costs associated with regulatory compliance, with both Harding-Davis and Anderson agreeing that this reflected the manner in which layers of regulation had been imposed on the industry over the past two decades.

Harding-Davis said that layers had evolved starting with the original Financial Systems Review (FSR), moving through the Future of Financial Advice (FoFA) changes and into the Government’s more recent legislative initiatives with little having been done to consolidate and simplify the situation.

This, in turn, had imposed significant responsibilities on licensees who had responded by implementing rigorous compliance regimes.

The result had been that senior compliance personnel were often amongst the highest-paid people in the industry, with a senior compliance office able to demand as much as $250,000 a year.




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Well, I just spent $560 to renew my TPB for another 3 years. I'll need to do that 3 more times for all the related entities and AR's before I'm done. To date I still cannot figure out what the TPB in our world is actually good for. Then the FPA will come with their hand out for a grand each, the ASIC Levy joins in and that's before forking out 38 grand for PI having never had a single claim or complaint in 31 years. At this point I start to look at running the business. Throw in Xplan, Morningstar, Microsoft plus the practice bill for wages for good people, rent etc and ....... remind me again why anyone would touch this profession as a career path? Now comes the affordable advice discussion. Let's put this into the context of 10 year plus lookbacks by the major banks and I'd be thinking what part of limiting advice today even with the clients' instructions will come back to bite years down the track. Probably why almost no adviser touched the 10 grand Covid advice, knowing for $300 you'll have someone ring you up years down the track and blame you for letting them destroy their retirement. I propose a solution: By the end of this year everyone must have passed their FASEA which theoretically puts us on the highest moral and technical standing. Regulators please acknowledge and accept this and get off our backs. Deal with the real crooks and cowboys out there. AFA and FPA, cease all corporate sponsorship immediately and become true professional organisations. One can hope.

If Hume had a clue about our dire predicament and the history of financial advice regulation over the last 20 years, she would know that ASIC is the problem. To put them in charge of this review shows her complete ignorance and lack of engagement. The so-called consultation has already been tainted by a clear bias towards one-off advice (ie. Conflicted Industry fund intra fund sales/customer retention) and the exclusion of ongoing advice which is the way most consumers engage with independent financial advisers.

Hey Duke Nukem, you are absolutely spot on with your comments. For a small 2 planner practice we have to make $100,000 a year to cover costs before we make $1 to pay ourselves. If we throw in a staff member (that we need) to help us grow the business to become profitable, make that $140k plus.
There are so many ways that advice could be cheaper, but ASIC won't seem to make the decisions that allow us to simply help clients. After all, that is what almost every planner in the country wants to do; help people.

We need to get rid or this ridiculous AFSL system and have each planner responsible for their own actions and acting in the clients best interest. Have 1 government body that we report to that covers everything. Then maybe we don't have to waste hours trying to work out which government website to log into to renew another registration, only to find that the email we received didn't apply to financial planners, but they just send it to anyone that it 'might' be relevant to.
And they wonder why virtually no one wants to join the profession. Never mind. In 5 years time there will be so few planners left that we will only help people who are willing to pay our ever increasing fees. And forget insurance advice. We've already stopped giving it, as we are not prepared to lose money for the first few years, as even the legislators acknowledged would happen with LIF.

ASIC are not able to do the job requested. They are like the Police force. They enforce the current laws, they do not design the corp law, or review the TPB or the requirements for FASEA or other areas. Simply they are the wrong body for the task.

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