The Better Advice bill passed the Senate late on Thursday afternoon, without amendment, addressing many of the industry’s biggest issues.
The minister for financial services, superannuation and the digital economy, Senator Jane Hume, said the legislation was another step forward in implementing the recommendations from the Hayne Royal Commission.
“From 1 January, 2022, the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investments Commission (ASIC) will become the single disciplinary body for financial advisers and will be able to hear complaints about an adviser’s compliance with the financial services laws and the code of ethics,” Hume said.
“The panel will be chaired and assisted by ASIC, and made up of members of the industry appointed by the relevant minister. Peer review will therefore be the primary channel through which misconduct is assessed and sanctioned.”
The legislation also introduced new registration requirements for financial advisers to improve accountability and increase transparency for consumers when accessing financial advice.
“Consistent with recommendation 7.1 of the Review of the Tax Practitioners Board, the legislation removes duplication for financial advisers who provide tax (financial) advice by ensuring they are only subject to one disciplinary and registration system,” Hume said.
“The legislation also transfers the functions of the Financial Adviser Standards and Ethics Authority (FASEA) to the Government to reduce the number of bodies involved in the oversight of financial advisers. ASIC will be responsible for delivering the financial adviser exam.
“The legislation gives the Government the power to extend the cut‑off date for certain existing financial advisers to pass the exam. The Government will use the power to extend the cut‑off date to 30 September, 2022 for advisers who have attempted the exam twice prior to 1 January, 2022.”
Dante De Gori, Financial Planning Association of Australia (FPA) chief executive, said the FPA welcomed the passing of the bill and looked forward to the stability that would follow.
“After eight years of constant regulatory change, financial planners now have the opportunity to focus on their clients and on the challenge of providing financial advice to more Australians without the distraction of constant regulatory change,” De Gori said.
“These changes will streamline regulation, ultimately reducing costs to the profession and consumers.
“Whilst this legislation now provides a level of clarity as to who regulates financial planners, there are still outstanding issues that need to be addressed through regulations.
“The FPA will continue to work through these regulations and engage with members and stakeholders to ensure constructive input into the implementation of the reforms, as the Treasury consults on the operation of the FSCP panels at ASIC.”