ASIC promises relief for planners

The corporate regulator has given the strongest indication yet it will act to ease the compliance burden on advisers under the Financial Services Reform (FSR) Act, hinting at possible amendments to the Act itself after acknowledging its attempts to date to lessen the load on planners have fallen short.

The biggest sticking point for planners under the Act has been the onerous obligations relating to statements of advice, which the Australian Securities and Investments Commission (ASIC) attempted to address earlier this year when it issued a policy directive allowing for reduced documentation for ongoing advice.

“We’ve looked at the statements of additional advice that we added and are considering doing something beyond that, as we’ve had a lot of feedback that it’s not working as well as we would have hoped,” ASIC executive director of financial services regulation Ian Johnston told Money Management.

Johnston was unable to reveal how the regulator would seek to address the matter last week, however, he did say ASIC was liaising with both consumers and the industry to find a workable solution.

“The way advisers are treated [under the legislation] doesn’t adequately consider advice as an ongoing process and tends to consider each piece of advice as a distinct event... so what we’re looking at is finding a way to recognise when there is an ongoing relationship,” he said.

Johnson said if ASIC could not act to address the issues using its own powers, it would urge the Federal Government to seek legislative amendments.

“If there’s any refinement that we think is needed that we can’t achieve through issuing our own policy and guidance then we will make Treasury aware of that,” Johnston said.

ASIC has also hinted planners may yet be granted the same relief as stockbrokers in relation to exemption from providing statements of advice to clients in time critical situations, despite the regulator dismissing an application from the Financial Planning Association (FPA) to do so through a class order.

“We did receive a submission for relief from the FPA... but under the law we didn’t think we were able to do that. However, it is something we are continuing to look at,” he said.