SDB should only focus on significant issues

3 June 2021
| By Jassmyn |
image
image
expand image

With the cost of running an advice business continuing to increase, the Association of Financial Advisers (AFA) believes the proposed Single Disciplinary Body should only focus on significant issues as it is primarily concerned with the cost and complexity of running the body.

In its submission to the Financial Sector Reform (Hayne Royal Commission Response – a New Disciplinary System for Financial Advisers) Bill 2021, it said minor matters should not need to be reported to the Financial Services Credit Panel (FSCP) and matters of a more moderate nature should be dealt through an administrative process rather than a panel.

“We believe that there needs to be a sensible and efficient mechanism for matters to be triaged and that only significant matters should end up being reviewed as part of the panel process. Also FSCPs should be set up to consider multiple issues, and not just single matters,” it said.

“We note that it is proposed that Australian Securities and Investments Commission [ASIC] will triage all matters. We have reservations about the impact of this on the timing of the FSCP dealing with matters. We address this further in our recommendation that an FSCP secretariat be established, and they be the body responsible for triaging.”

The submission noted that the exposure draft legislation and the explanatory material was not clear on how all matters would be directed to ASIC.

“Whilst it is apparent how matters that result from consumer complaints to ASIC and breaches reported to ASIC will be captured by this regime, it is less obvious how other matters will flow through to ASIC,” the AFA said.

“For example, Australian Financial Complaints authority [AFCA] only pass on certain matters to ASIC at present, including those that are considered to be ‘systemic’. There is no current model for professional associations to pass matters on to ASIC. How will the flow of these matters be regulated? We believe that this needs to be explained and privacy issues with the passing on of personal information needs to be considered.”

AFA also said it was concerned that the funding of the disciplinary regime would implicate future ASIC funding levy amounts given the regime would be funded through the new adviser registration fee and an increase in the ASIC funding levy.

“It is concerning that there is no indication of what the impact is likely to be, however it would obviously be very substantial,” it said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago