Advisers need certainty of DDO nil reporting extension
The Government’s intended changes to the Design and Distribution Obligations (DDO) reporting requirements under the Corporations Act are likely to take so long that extending there is a need to extend the current DDO nil reporting exemption until October, 2028.
The Australian Securities and Investments Commission (ASIC) has been told that in the absence of the nil reporting exemption relief provided in 2021 the cost in time and money to the advice sector would have been significant and provided no value.
The Stockbrokers and Investments Advisers Association has told ASIC that its members distribute products such as exchange traded funds (ETFs) and managed funds from hundreds of issuers while receiving very few complaints about the products.
“SIAA members receive very few complaints about these products. Without the relief from the nil complaints reporting requirement, our members would have been required to send many hundreds of ‘nil complaints’ reports every quarter,” it said.
“Before the original relief was provided in 2021 our members were telling us that the work involved in setting up a system to communicate these reports to issuers was proving to be costly and burdensome.
“As a result, SIAA advocated for a change to the DDO regime to exempt distributors from the requirement to lodge nil complaints reports, as it imposed a significant and unnecessary regulatory burden upon them without providing any benefit to issuers or consumers.
the SIAA submission said.
It said that the SIAA had been mindful of the looming expiration date of the nil reporting relief and noted that the Quality of Advice Review (QAR) final report had recommended amendments to the DDO reporting requirements to remove the requirement for relevant providers to report to the product issuer where no complaints had been made.
“However, while the government has accepted the recommendation to amend the DDO reporting requirements in the Corporations Act, we acknowledge that changes to the Corporations Act are unlikely to be made before the expiration of the current relief and we agree that it is necessary to extend the operation of the instrument to retain certainty for industry ahead of any law reform,” the SIAA said.
“Accordingly, we strongly support the extension of the expiry of the instrument until the start of October 2028.”
DDO is a great example of multiple layers of useless Adviser mass over regulation.
But hey Canberra let’s just add another layer of costly Red Tape crap to the Adviser process.
DDO is a product manufacturers regulation that Advisers should never have had lumped on us.
FFS Canberra / Jonsey REDUCE SOME OBVIOUS AND USELESS RED TAPE RUBBISH NOW !!!!!!!!!!!!!!!!!!
Any pragmatic advisor who has best intent of client at heart and has appreciation of myriad complexities associated with manufacturing and distribution of financial product will always support the DDO regime.
All DDO regime does is ensure customer feedback captured by product distributors which includes financial advisers are passed on to product manufacturer so that they continue to make and update products so that it suits customer need. From personal fiancial advice perspective there is an obligation on product distributor to collect and pass feedback and there is obligation on product issuer to act on feedback. Nothing more nothing less. i don’t understand what the fuss is all about.
If you don’t have client’s interest at hear pick another occupation, this profession is not for you.
Spoken like a compliance bureaucrat who believes advisers and clients have endless time and resources to navigate convoluted systems that remove every tiniest scintilla of risk. Life is full of risks, and if you go too far in trying to remove them all it becomes counterproductive, and you miss out on life.
The only people who benefit from excessive regulation and compliance are the leeching regulators and compliance bureaucrats. Consumers certainly don’t. They turn to simpler, cheaper, much more dangerous unregulated alternatives, once regulation gets too extreme and expensive.
I feel for your clients if you genuinely believe pointless box ticking exercises means you’re adding value as their adviser. DDO is a pointless regime arising from a report conducted years ago and for a completely different regulatory environment. It was nothing more than an attempt by the prior Government to look like they were doing something and being tough on the financial services sector while really just further kicking advisers with no care or concern as to whether the new regime would actually add any value to investors.
You’re not familiar with the overriding financial services law, and acting the best interests of your clients, of which the recommended product falls under? DDO is pointless for advisers.
Interesting argument. Does that apply risk policies? I’ve been haranguing life insurance companies for years about totally needless exclusions and nasty wordings in the standard PDS document. Rarely do I have the victory. But I’m always arguing in the interests of my clients. My understanding of DDO is that it won’t do anything about severity in life insurance contracts, because the insurer just says “that’s the terms and conditions we offer and here is the pricing based on those terms and conditions”. Remembering of course there will never be an insurance product that covers all risks for all people