Advisers vindicated on breach reporting
ANALYSIS
The financial advice industry has been vindicated. The former Government and the Australian Securities and Investments Commission (ASIC) were warned by all the major financial planning organisations that the new breach reporting regime would generate an explosion in breach reports.
Little more than a year after those warnings were sent to Treasury in the form of submissions responding to the Government’s proposed regulations, ASIC has acknowledged “we are aware that the regime has led to a number of implementation challenges”.
The implementation challenges now being encountered by ASIC could have been addressed in amendments responding to industry feedback in April, last year, but instead dealer groups and self-licensed advisers have found them having to grapple with significant legislative complexity.
It is little wonder that the Association of Financial Advisers (AFA) and the Financial Services Council (FSC) quickly welcomed the statement by ASIC commissioner, Sean Hughes, that the regulator will engage with the industry “to further understand any issues that are placing unnecessary compliance burden on industry”.
Hughes and his team from ASIC could do worse than ask Treasury to share the industry’s submissions with respect to the Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2020 Measures)) Regulations 2021: Breach Reporting legislation which sits at the heart of the breach reporting regime.
In its submission to Treasury, the AFA pointed to the complexity that was about to be inflicted on the sector stating: “Our serious concern … is that it is significantly moving away from the concept of significant breach reporting and that this new regime will involve an exponential increase in the number of breaches that need to be reported and many of these will be of a largely administrative nature”.
The AFA said in its submission that it had held a number of discussions with its licensee partners and was well aware of the serious concerns that many of them have with the implications of this legislation.
“In one case, a licensee who had 4 breaches reported in 2020, expected on the basis of the new legislation, that this would increase to 198,” the AFA submission said. “Their feedback suggests that the exclusion of civil penalty matters for the failure to deliver an FSG and a PDS would only marginally decrease the number of breaches that would need to be reported.”
Speaking to Financial Newswire yesterday, AFA chief executive, Phil Anderson said his organisation had recognised the issues with the breach reporting changes from the outset and he was pleased to see ASIC was willing to consult on the issue.
For its part, the Financial Services Council said it welcomed the ASIC announcement.
“The new breach reporting regime introduced in October 2021 has given rise to a number of challenges for financial services businesses, and ASIC’s engagement with the FSC and industry has been positive on this issue,” it said. “Enhancements to the breach reporting portal and better guidance on how to use it will be a positive start in addressing these problems, benefiting licensees and ultimately consumers.”
ASIC are such muppets. They never listen, rarely consult and autocratically decide what is best with system of recourse at all.
Gonzo, miss piggy and Kermit would be proud of them.
with the exception i really loved the muppets but have no time for ASIC nor govt on these issues. They blatently lied about the extent of their so called “industry consultations” and then ignored whatever was put to them. Saying they are willing to now look at the issues and consult industry is an insult to the profession and every single Adviser and the pain and anxiety inflicted. I’d go harsher than using the adjective “muppet” to describe them
Hopefully Michelle Levy is paying close attention to this. It might help her understand why advisers are so scared of ASIC and AFCA. They are bad regulators, with a culture of indiscriminate persecution and vengeance.
The bad regulation preventing consumers from accessing affordable, professional advice is a combination of bad legislation, and bad regulators like ASIC and AFCA.
We’re past that, it’s corruption. Regulators writing legislation under the direction of Large Super Funds and Insto’s on the basis they’ll one day be working in those firms on huge salaries.
How many more things does ASIC need to stuff up before they are held accountable? They simply can’t work in the advice space because their hatred of advisers means they won’t listen when advisers tell them exactly what will happen with their poorly thought through regulations. Everything that advisers have said will happen has been shown to be true, however ASIC still ignores any feedback because they think they know better.
Spot on. It’s a combination of a hatred of Advisers, like you said, a lack of representation, and large Insto’s and Union Super Funds driving the Agenda. The result is Australian Consumers getting shafted. That’s called corruption and needs to be called out. We need representatives of the Advice Sector to say enough is enough, we no longer have the confidence to follow their bad regulations.
We are past the point of calling these guys muppets and clueless…They’re indeed very smart… If you design legislation where you can’t give a client a fee disclosure statement on a Monday because the anniversary date is a Tuesday then what we’re seeing is not incompetence, it’s past that, it’s blatant corruption. What we’re seeing is Public Servants, Treasury Officials on a blatant vendetta to wipe out human lead advice. It’s corruption and it’s about time it needs to be called out. Union Super Funds, Large Insto’s don’t want Planners holding them accountable, and acting for the client.
This level of incompetence can’t be accidental