Compliance costs to grow under FSRB
The impact of the Financial Services Reform Bill (FSRB) on the industry could spell out increased paperwork and higher costs.
Andersen Legal director of corporate and finance Alan Jessup, who specialises in funds management and corporate and securities regulation, says financial services practitioners will need to ensure they have adequate systems in place if they are to meet their obligations under the Act.
"These include compliance procedures, manuals, reporting surveillance systems, supervision practices and training programs for employees," Jessup says.
"This means extra staff and resources. The cost to business could increase significantly."
Jessup says practitioners will need to review their professional indemnity insurance policies because under the Bill, they have an "absolute obligation" to have such arrangements in place to cover for compensation in the event of breaches of obligations by practitioners.
"There may be a need for practitioners to have provisions for compensation in addition to their insurance cover," he says.
Recommended for you
A relevant provider has received a written direction from the Financial Services and Credit Panel after a superannuation rollover resulted in tax bill of over $200,000 for a client.
Estimates for the calendar year 2024 put the advice industry on track for a loss in adviser numbers as exits offset gains from new entrants.
Adviser Ratings shares five ways that financial advice changed in 2024 with an optimistic outlook for 2025, thanks to the Delivering Better Financial Outcomes legislation.
National advice firm Invest Blue has announced several acquisitions, including the purchase of an estate planning and wealth protection business Lambert Group.
