Small planners beg for FSR clarity
Independent, small planning businesses and dealer groups have asked for a clearer set of compliance processes under the Financial Services Reform Act (FSRA), removing what is currently viewed as business uncertainty.
In a submission made to the Joint Parliamentary Committee on Corporations & Financial Services in mid-July, Boutique Financial Planning Principals Group president Bruce Baker raised a number of concerns and says business uncertainty is facing practices with only one or two planners, under the FSRA licensing transition.
Baker says the while the Australian Securities and Investments Commission (ASIC) has agreed compliance procedures for smaller businesses will be different to the larger groups, the lack of a clearly defined process is still a concern to independent groups.
ASIC licensing and business operations FSRA director Pauline Vamos says smaller groups should be asking themselves the fundamental questions, such as what needs to be done for compliance, and then developing measures themselves.
According to Baker, the committee shares ASIC’s view that compliance requirements for smaller practices should be approached differently to larger groups.
The committee will hear 33 submissions in total from various industry groups and associations in its inquiry into the regulations and ASIC policy statement made under the Financial Services Reform Act 2001. The next hearing will be held in Sydney on August 7, 2002.
“Our primary initial concern is the significant business uncertainty caused by FSRA — because of the way the rules are written. The big issue is trying to narrow it down,” Baker says.
“Given the vagueness of the way ASIC policies are written, we could be stuck between the two extremes of different ways people are interpreting the rules,” Baker says.
“My impression is that [the committee] will be recommending the prescriptive features of the policy statements be scaled back substantially,” he says.
“Groups are best placed to determine what the measure should be, it needs to be what will work for them. We agree different businesses of size will have different systems in place,” Vamos says.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
