FASEA contender for policy failure
The winding up of the Financial Adviser Standards and Ethics Authority (FASEA) represents a “stunning admission of failure” by the Government towards the financial advice sector.
Speaking in the House of Representatives on the Better Advice Bill, Labor’s Julian Hill, highlighted the failures in the implementation of the FASEA regime. FASEA was due to be wound up and responsibility would be transferred to the Australian Securities and Investments Commission (ASIC) at the end of 2021.
“FASEA is being wound up and will be taken over by ASIC and that is a stunning admission of failure, it was set up only three years ago and has had a litany of stuff-ups. It has had three chief executives in 18 months which is a clear sign it is not going well,” Hill said.
“Standards were only released a few days before they were due to come into effect, causing adviser chaos.
“If there was an Olympics Games for implementation failure, this would certainly make the final.”
The only reason, he said, that it would not win a medal was because other failing measures such as the vaccine roll-out had cost people’s lives.
Hill added Government legislation over the years had led to advice being only available for the wealthy and called on politicians to find a way to close the advice gap which had opened up.
“Everyday Australians can’t afford financial advice, it has become something only for the wealthy but yet there has never been more need for it,” Hill said.
“More than 4,000 advisers have left the industry in the last three years and more are set to leave in the future so there is a smaller pool and higher demand. The Government needs to work out how to close this advice gap.”
AUTHOR
Laura Dew
Recommended for you
The FAAA is actively exploring and has sought legal advice on how the problem of phoenixing AFSLs can be avoided to prevent the burden falling on the CSLR and the advice sector.
An advice AFSL has seen its licence cancelled by ASIC this month for failing to pay an AFCA determination, which was then covered by the CSLR.
After weeks of fluctuating above and below 15,500, adviser numbers have maintained their hold above the line for three consecutive weeks.
The FAAA’s Phil Anderson believes the problem with Dixon Advisory is “much bigger than an advice issue” and the levy to pay for it should be expanded beyond the financial advice sector.
