ALRC backs advisers on regulatory burden
The Australian Law Reform Commission has reinforced the fact that financial advisers are being penalised by unwieldy legislation and regulation and how they feed into the Australian Securities and Investments Commission industry funding model.
In its final report to the Government the ALRC has specifically referenced financial advisers as being impacted.
“The complexity of the existing legislative framework creates substantial unnecessary costs for businesses and other regulated persons, such as financial advisers,” it said.
“These costs are unnecessary because the legislative framework could be designed to enable policy objectives to be translated more effectively into legislation. The costs to regulated persons principally result from the higher compliance expenses and the less predictable regulatory environment generated by legislative complexity.”
“In addition to these costs, regulated persons indirectly bear the costs of unnecessary complexity incurred by ASIC, given the industry funding model on which ASIC operates.
“The most immediate costs faced by regulated persons appear in the form of higher compliance expenses. Compliance costs increase because regulated persons must navigate a complex legislative framework to identify and understand their obligations. It is well established both theoretically and empirically that complex legislation produces higher compliance burdens,” it said.
“in addition to ‘opportunity costs involved in the time and energy devoted to compliance’. Evidence suggests compliance costs may be particularly burdensome for small businesses, which lack economies of scale that help others manage compliance costs.”
Elsewhere in the report, the ALRC said that unnecessary complexity in the existing legislative framework created barriers to entry that might reduce competition in financial services and financial markets.
The ALRC has recommended significant simplification of the act, including around the definitions of financial advice and financial services.
Great job Canberra pollies, bureaucrats & regulators. NOT !!!!
20 years of ever increasing Useless BS Red Tape madness.
ASIC are still adding to this madness right now with FAR Re-registration and IDR Report NOTHING.
ASIC YOU MORONS, what don’t you get about how stupid, costly and useless you are?
I think we should hold an enquiry, spend millions, to try and crack the chestnut on why advice is so expensive and regular Aussies can’t afford advice.
A real head scratcher???
1000000% CORRECT, Only a 2 year long expensive Govt consulting report into these issues will have any chance of working out what the problems are. Then 2 more years to consult on the consulting report.
Followed by more Govt / Regulator Red Tape introduced on mass, triplicating existing Red Tape.
But call it Reducing Red Tape.
BINGO !!!!!
So we should expect to see some ‘quick wins’ in about 2038 and the new ‘single’ piece of legislation to be added on top of what’s already in place!
Woah, slow down Peter. Try 2058. Don’t get ahead of ourselves here.
ASIC should re-open the case and properly investigated the financial planner they crucified (lost their houses, savings and nearly lost his family and suffered significant distress through this experience until now) for alleged churning of insurance products. Through some bogus complaint regarding this financial planner, they alleged the financial planner churned insurance products and put his clients into an inferior product and claimed commissions from it (His superiors received the commissions as per factual evidence, not him). Executives & Staff that presented these evidences was severely manipulated.
Please see below some evidence:
The points above were severely manipulated to make it look like this financial planner was a crook. Isn’t it a crime when an information given to ASIC is manipulated?
Turns out, this financial planner had no choice to represent himself at the AAT (no funds to hire a lawyer or barrister, spent $400k trying to prove this complaint was bogus). Proper evidence presented by this financial planner shows new life insurance products had more features and benefits and monthly premiums was “significantly” lower. This financial planner had no compliance breaches throughout his tenure with his coward employer, 100 plus good character references from the community and industry & had all the awards. When the truth started to surface, executives and including ASIC delegate who ruined this financial planner’s life, retired/resigned and employed somewhere else & ASIC stating after the truth being revealed a better outcome should’ve been “Retraining & monitoring this financial planner” (It would’ve save time & money going after the wrong person). ASIC has ruined this person’s life including his family (I am sure ASIC staff have families themselves) by clearly not investigating this matter thoroughly, they simply relied on manipulated materials provided to them. ASIC need to take accountability for these significant errors & apologise. Taking accountability will assist in reviving their tarnished reputation as an effective regulator for the people.
Adding to it, ASIC should investigate his employer to obtain the truth, who took all the ongoing commissions & fees & signed the incorrect transfer form.
How much money and time was wasted on an exercise that would have solved by having 10 financial planners put their heads together in a single one hour meeting? Obviously the views of financial planners would be ignored, but maybe the ARLC views might be listened to. While the report to government will be read, no one expects any “quick” win to fix this “hot mess”. The current (and previous) governments have demonstrated they have no desire to address the problems and any attempt to fix anything will be very minimal and most likely result in further complexity, unless financial planners are properly included in the process.
The comments so far are really missing the point here. This is the first time I can remember that anyone outside of advice has recognized the absurdidty of the current legislative and regulatory situation in relation to advice.
The fact that it’s come from a comprehensive legal review of the corps act and specifically pointed out issues relating to advice is a huge win for our industry.
Obviously it won’t lead to overnight change but at a time when the Government and Minister Jones are trying to table legislation that would ignore all of the current issues and create an uneven playing field through “qualified advisers” and vertical integration that only banks/super funds/insurers are allowed to take part in, it’s a desperately needed small win.
100% on the money
Will have a good read of this report and file it…..in file 13.