Fintech licensing exemption creates inequality
The Financial Planning Association has disputed the need to provide licensing exemptions to financial services technology start-ups for six months, arguing the problem is within the licensing regime itself.
Speaking at the FPA Sydney member roadshow, chief executive, Dante De Gori, said the Australian Securities and Investments Commission's (ASIC's) move to canvass a regulatory sandbox approach for fintech start-ups created an uneven playing field, and argued everyone in the financial advice industry should benefit from any changes to licensing regimes.
"I'm not here advocating that exemptions should be applied to fintechs. We don't accept providing exemptions to the licensing regime purely because you're a fintech," de Gori said.
He added the FPA was concerned that exemptions to the licensing regime would reduce the integrity of the regime and remove some of the consumer protections.
"The licensing regime is designed to do a couple of things: number one is to ensure that the right people are starting up businesses and running businesses that are appropriate, secondly to protect consumers," de Gori said.
"In our view, if the licensing regime doesn't accommodate innovation or doesn't accommodate the ability for start-ups to enter, then there's a problem with the licensing regime. We feel that that should be concentrated on rather than providing exemptions."
Innovation was not simply the domain of fintechs, as there were many people who wanted to establish innovative financial services business but were constrained due to the current licensing regime, de Gori said.
"Either the licensing regime is robust enough to cater for everybody that wants to be in it or it's not. And if it's not then fix the licensing regime.
"If it is a barrier to fintechs, it's not just a barrier to fintechs, it's a barrier, full stop," de Gori said.
AUTHOR
Malavika Santhebennur
Recommended for you
BT is to launch a new low-cost “Focus” investment menu for its Panorama platform this October, in partnership with Vanguard, seeking to compete with industry superannuation funds.
National advice firm MiQ Private Wealth has appointed a new chief executive to lead the business through a “transformative era” after penning a partnership deal with AZ NGA earlier this month.
WT Financial’s managing director, Keith Cullen, believes the firm’s Hubco model with Merchant Wealth Partners will be a “repeatable growth model” for the business as it scales its adviser numbers.
Australians under 45 expect to need $100,000 per year to retire comfortably, but almost half the working population have no plan on how they will achieve this, Vanguard has found.
