ASIC warned on unnecessarily delivering regulatory complexity

The Australian Securities and Investments Commission (ASIC) can play a role in reducing the cost of delivering financial advice by looking at the manner in which it translates legislation into regulation.

That is the assessment of the Shadow Assistant Treasurer and Shadow Minister for Financial Services, Stephen Jones, said he believed ASIC needed to look at its own approach and its own guidance.

He said this was in circumstances where a well-meaning set of regulatory requirements could be translated into an increased burden of financial advisers which the Parliament had never intended to occur.

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Jones said he was of the view that advice could be made more affordable if the regulatory arrangements were actually commensurate with the complexity of the advice being delivered.

“The regulatory burden should be in proportion to the risk involved,” he said.

Jones also expressed concerns about vertical integration, including with respect to not for profit funds seeking to deliver financial advice.

He signalled that as industry superannuation funds ventured further into the financial advice arena they would need to be conscious of the problems encountered by the major banks and other vertically-integrated structures.

Jones said it would be naïve to suggest that the same issues which had impacted the banks with respect to advice within vertically-integrated structures would not apply to the not for profit sector.

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Wow. This is the most sensible thing I have heard any politician say about financial services regulation.

Too many people make the mistake of saying "don't blame ASIC, ASIC is just there to enforce the law". The problem with that argument is that the law is incredibly complex and ambiguous, and ASIC has enormous discretion in how that law is interpreted and enforced. A huge amount of blame for the difficulties consumers now have in accessing affordable, professional advice must be attributed to ASIC.

By all means reform is needed to simplify the mess of complex and overlapping regulations. But at the same time a cultural overhaul is needed at ASIC to ensure regulation is implemented sensibly and fairly in the best interests of consumers, rather than in a way that indiscriminately persecutes all advisers as revenge for the behaviour of a minority in the past.

Exactly, great comment from a most unusually sensible article.
ASIC’s overly paternalistic, clients know nothing and must be protected from everything BS REGS world is protecting loads of mums and dads as they this CAN’T afford to get Advice.
Jones is dead set right and Hayne missed the biggest Elephant in the room and allowed Vertical Integration Advisers owned by product providers will forever be totally conflicted and this requires ridiculous BS REGS to try to make it smell right but it never will.
Ban vertically integrated Advice and most of the BS REGS can disappear. But only if ASIC takes its knee off the throat of Advisers.
Hey ASIC, we CAN NOT breath !!!!

If you took advice from 10 financial advisers one after the other. Every adviser would want to roll the super recommended by the previous adviser into a different fund. What is that?

That is a totally biased, inaccurate, and out of date view.

Which one of ASIC, Choice, or union super do you work for Jim? Or are you just one of those angry old codgers still fighting the battles of last century, without realising the world has moved on?

If you look at 10 different car buyers, they would choose 10 different cars. There is a thing called choice. It is based on the goals, preferences and what you are looking for. Choosing a super fund is just the same as choosing a car.

The alternative is to say there is only ONE perfect super fund. Therefore roll all the super funds into the "Future Fund". Is this what you want to see?

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