Some significant challenges lie ahead for the new assistant minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, as she steps into the portfolio this week not least the being the continued funding and working of the Financial Adviser Standards and Ethics Authority (FASEA).
Hume’s appointment has been broadly welcomed by the financial services industry but, once sworn-in, she can expect almost immediate overtures from both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) for the granting of an extension to the FASEA exam arrangements to give advisers more preparation time.
She is also likely to be faced with the reality that the exit of the major banks from wealth management will mean the Government having to find a new funding source for FASEA when the existing arrangements, largely underwritten by the banks, end in May, next year. The most obvious option is another levy on the industry.
The chief executive of the FPA, Dante De Gori welcomed Hume’s appointment but confirmed that seeking an extension of time on the FASEA examination represented a priority issue for financial planners who had been adversely impacted by the amount of time it had taken to put the new regime in place.
Hume will also be confronted with the need to deal with the fast-approaching deadline for putting in place the code-monitoring arrangements under the FASEA regime in circumstances where potential code monitoring bodies need to lodge their applications with the Australian Securities and Investments Commission (ASIC) by 30 June so that a regime can be in place time by 15 November if advisers are to sign up and be deemed compliant on 1 January, next year.
De Gori said the issue of code monitoring had been complicated by the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry which recommended the establishment of a single, central, disciplinary body rather than the code monitoring body.
The FPA, AFA and five other industry bodies have coalesced with a view to forming a code-monitoring body but whether they proceed depends on the Government’s acceptance or otherwise of the Royal Commission’s recommendations.
Further into her tenure in the portfolio, Hume will also need to address the future of life/risk commissions in the context of ASIC’s review of the Life Insurance Framework (LIF) scheduled for 2021.
Both the AFA and the FPA have formed a taskforce to develop a united approach to the life/risk commissions issue.