Call to use Single Disciplinary Body to reduce, not increase costs

It is important that the winding up of the Financial Adviser Standards and Ethics Authority (FASEA) and introduction of the Single Disciplinary Body be leveraged by the Government to reduce the cost impacts on advisers, according to the Stockbrokers and Financial Advisers Association (SAFAA). 

In a pointed submission responding to the Treasury discussion around legislation to establish the single disciplinary body, the SAFAA makes clear that containing regulatory costs is paramount. 

And, in similar fashion to the Financial Planning Association (FPA), SAFAA has urge the coupling of financial adviser registration with the existing authorisation process delivered by Australian Financial Services Licensees. 

There is now a clearly developing agenda on the part of adviser representative organisations that while individual adviser registration is important, it should be delivered within the context of Australian financial services licence (AFSL) authorisations, thus retaining the status licensees and dealer groups. 

“The obligation to register a financial adviser must sit with the financial services licensee on whose behalf the adviser is authorised to provide personal advice to retail clients,” the SAFAA submission said. “Bearing in mind the large cost burden currently imposed on licensees as a result of the significant increases in the ASIC industry funding levy; implementation of Royal Commission recommendations; and the costs associated with the FASEA exam and education requirements any registration fee per adviser must be a nominal one.” 

The SAFAA is also recommending a single registration period per year for all financial advisers be adopted to bring adviser registration into line with other professional registrations. 

Elsewhere in its submission the SAFAA has urged that stockbrokers and investment advisers be amongst those appointed to the panel which will oversee the operations of the Single Disciplinary Body, noting that absence of such diversity had contributed to the failure of FASEA. 

It also expressed concern at suggestions that the Australian Securities and Investments Commission (ASIC) might have the power to terminate panel members. 

“SAFAA would be concerned if ASIC could exercise this power to terminate a Panel member’s membership simply because the member disagreed with the ASIC-appointed chair,” the submission said.