A member of a key Parliamentary Committee has asked the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) whether advisers have stopped short of challenging the Australian Securities and Investments Commission (ASIC) because of fear of regulatory retribution.
NSW Liberal back-bencher, Jason Falinksi asked the question during a hearing of the House of Representatives Standing Committee on Economics and said that had been the feed-back he had received from some constituents.
He also asked whether mental health issues had been generated by adviser concerns.
Both the FPA and AFA said that the financial planning industry is as at tipping point with around 6000 advisers having left the industry and only around 51 graduates having entered in the first half of 2020.
The FPA and AFA also made clear that there were continuing issues with the operation of the Financial Adviser Standards and Ethics Authority (FASEA) regime, not least Standard 3.
FPA chief executive, Dante De Gori said that his organisation’s members were broadly supportive of the objective of the FASEA regime but were concerned about the manner in which that regime had been implemented by FASEA itself.
AFA general manager, policy and professionalism, Phil Anderson said that his organisation’s members were concerned that FASEA had not addressed the value of prior learning and continuing professional development (CPD) and the manner in which this had impacted the future of older, highly experienced financial advisers.
Both the AFA and FPA said that the level of regulation being imposed on the industry was making the cost of delivering advice cost-prohibitive and that this was occurring at a time when, faced with COVID-19, clients badly needed access to advice.
FPA chair, Marissa Broome pointed to the rising costs confronting financial advisers, noting that she was a practicing financial planner holding her own Australian Financial Services License and had seen compliance costs rise ten-fold.