Chief executive of the Financial Adviser Standards and Ethics Authority (FASEA), Deen Sanders, has used a talk to the SMSF Association Conference to try and reassure advisers about both the impact of and incentive behind the Authority’s education reforms.
Sanders focused on the fact that the proposed reforms were necessary for the financial advice sector, and that the Authority would be working with the industry rather than against it to ensure that all Australians could be confident in the financial advice received.
Sanders pointed to the fact that there had been 12 separate government inquiries into financial advice in the last 10 years, with consistent issues arising about the basis advisers had to give advice. While he said he appreciated some questioned the purpose behind the inquiries, that did not change what they found.
Sanders said that an ASIC finding that 75 per cent of financial advice given in January, this year was not compliant with the law was evidence of why change was needed. He also flagged that poor financial advice may be an early focus of the Royal Commission.
He said that it proved why “this was not yesterday’s problem, but today’s problem.”
Sanders said that a lot of information had been sent out to stakeholders, of which interpretations had been both accurate and inaccurate. He said that he wanted to present that information in a direct way, rather than the “more subtle way” it had been communicated thus far, to ensure there were no further misunderstandings.
Part of this was clarifying the role and purpose of FASEA. Sanders was at pains to outline exactly what FASEA’s functions were, where that power was sourced from, and that the carrying out of those functions “was not a punishment for the financial advice sector, but a framework … for improvement.”
Sanders emphasised that planners and advisers should not panic, but rather view the changes as a chance to strengthen the financial advice industry.
“This is an opportunity. It’s a conversation on how we grow the industry … financial advice is extraordinary. It’s a deep relationship with your clients and it’s important. It’s important we get it right.”
Sanders declared that ultimately the advice, professional, standards and government communities were in “a compact together” to ensure that all Australians could have the confidence to seek financial advice.