The Federal Government has tasked the Australian Law Reform Commission (ALRC) with a substantial review of Corporations and Financial Services legislation.
The terms of reference for the review have been handed to the ALRC by the Attorney-General, Christian Porter, and have the potential to generate significant changes to the Corporations Act as it impacts financial services, financial planning and superannuation.
The terms of reference ask the ALRC to look at simplifying and rationalising the law in relation to the use of definitions, regulatory design and structure.
In doing so, the ALRC has been asked to take account of the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the 2017 Report of the Treasury’s ASIC Enforcement Review Taskforce, the 2015 report of the Australian Government Competition Policy Review, the 2014 report of the Financial System Inquiry and the 2014 report of the Productivity Commission Access to Justice Arrangements report.
The ALRC has been tasked with providing its first interim report by 30 November, 2021, with further interim reports in September 2022 and August 2023.
The final report is scheduled for 30 November, 2023.
Comments
This is all well and good but it's going to take 3 years for the final report.
If Jane Hume tries to use this as an excuse to continue ignoring the obvious problems in financial advice regulation that need fixing RIGHT NOW, she should be sacked and replaced with someone competent.
in a recent webinar hosted by the fpa's CEO Mr. Dante De Gori CFP (r), Jane hume was the guest. During the interview, she stated that there are 9 regulators/bodies who could potentially audit a financial planner and in fact, a financial planner could spend his or her whole year being audited and then she laughed.
she is the assistant minister for financial services and superannuation, she laughed and chuckled because she thought in her wisdom that having 9 entities audit a planner while she is in charge of the domain is funny and you expect her to unwind this ?
she hasn't got a clue, and if she thinks through it and consults with ASIC, together they will add another 3 more documents (preFDS - a document you give before you give an FDS, a post post opt in form, an opt-in form which needs to be signed after 12 months but before the second 12 months but after 90 days of being issued the first FDS but not more than 91 days after the first FDS if it is 90.5 days then it's a breach.
finally, there is the post post service/engagement agreement, which is 30 days after signing the first engagement letter this is to ensure that clients have 30 days cooling off you know just in case they decide not to opt into the service and this ties into the informed consent in standard 7 part a
just like the soft dollar commission register, we need to keep another register with the pre-fds, post post opt-in and post-post engagement letter which could also be called the pre-engagement letter. it doesn't really matter, ASIC will do a 3-year review and probably decide to accept both terms as they are near alike in the ordinary sense using the reasonable person test, so you will be fine if you call it either or just as long as you do it
so let's just keep quiet and get on with it because each time our associations suggest an improvement we have to produce more more paperwork paperwork
thank you,
cfp(r), m.fin plan, mba fasea exam passed planner
and you all think financial planners aren't funny
If they cock this up it could be the death knell for the industry.
Lawyers have done such a good job in the past in drafting the current laws, I can't imagine what could go wrong.
Really? 3 years!? Why so long? The in depth reviews and reports have been delivered. Issues identified time and time again. Yes let's fix what's broken but don't go rewriting for no reason. There should be industry consultation within 3-6 months. Initial report within 12. Lawmakers and regulators demonstrate a profound lack of commercial understanding and making laws in such an academic vacuum is counter-productive. The industry is already awash with over-regulation. But is the current law really so bad? The laws are actually pretty good in Australia. The key areas of weakness are individuals' lack of ethics and failure to comply with the law due to their own greed - but changing the law won't fix that, only stronger enforcement can do that. Virtually no-one goes to jail or gets significant pecuniary penalties for wrongdoing in this country. The failure to appropriately regulate stockbrokers and impose a best interests duty on those who operate SMAs for clients is also a significant gap particularly as ETFs grow in popularity. Stockbrokers churn client accounts to generate fees. And the potential for corruption amongst peripheral participants such as research houses and financial services press needs to be addressed. Paying more for research reports or advertising is likely to get a product a better rating or an "industry" award judged by advertising execs, both of which lead to opening doors and increased FUM. Oh, what do you know, it's all about the money.
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