CPA Australia has questioned whether Treasury has the skills and expertise to perform the Financial Adviser Standards and Ethics Authority (FASEA) functions once it had transferred over.
In its submissions to the Better Advice Bill inquiry, the accounting body said existing FASEA standards and the code of ethics would likely transition to sit within Treasury next year.
“However, if this is to be that case, careful consideration will need to be given as to whether Treasury has the necessary skill set and expertise to perform these functions,” it said.
“To support Treasury in this role, CPA Australia recommends the establishment of an independent advisory panel, consisting of an appropriate cross-section of experts and professionals from the sector to provide the necessary analysis, expertise and advice to both Treasury and the Minister.”
The submission also noted that CPA Australia was also concerned about potential increased costs to the financial advice sector with the formation of the Financial Services and Credit Panel (FSCP).
It cited that in the past two years the fee per financial adviser increased by 160% while the number of financial advisers had fallen to just over 19,000 from 25,200 in 2017-18.
“While the introduction of a single disciplinary model is welcomed, consideration must be given to the fact that the model will sit within ASIC [Australian Securities and Investments Commission], which will likely further impact the costs incurred by Australian financial services (AFS) licensees and their financial advisers under the ASIC industry funding model,” it said.
“The increasing cost burden is a significant challenge for many, noting that 90% of financial advisers are sole traders or part of a small business. The increasing costs will also continue to negatively impact the accessibility of affordable advice by the community, an issue on which ASIC are currently focused. While not within the scope of this inquiry, CPA Australia believes it is important that the ASIC funding model is urgently reviewed.”