FAAA urges extracting advisers from Aged Care regulations

Financial advisers should not become ensnared by the Government’s proposed new Aged Care Act, according to the Financial Advice Association of Australia (FAAA), the SMSF Association and the major accounting groups.

The joint groups have told Department of Health and Aged Care that while financial advisers assist clients with their aged care needs, they are already adequately regulated under the Corporations Act and should not become enmeshed in the new aged care regulatory regime.

The joint submission urged that the status of financial advisers be clarified to ensure they are not captured by the proposed new legislation.

“Financial advisers assist clients with their aged care needs. It is a requirement in the legislated Financial Adviser Code of Ethics for financial advisers to consider the potential future aged care needs of clients,” the submission said.

“This can include acting as the client’s representative in relation to aged care matters and when interacting with aged care providers.”

However, the submission went on to express concern about the possibility that financial advisers being caught up in the Aged Care legislation, stating it is unclear how the function of financial advisers, defined under the Corporations Act as ‘relevant providers’, fits into the role of an ‘advocate’, ‘representative’ or ‘supporter’ under the Exposure Draft.

“The law should clarify how the interaction between the definitions (and the intended role of a person acting under these definitions) in the Exposure Draft applies to the assistance financial advisers provide clients in relation to their aged care needs,” it said.

“Given the provision of financial advice is heavily regulated under the Corporations Act and the Code, with oversight by ASIC, we recommend it be made clear that ‘relevant providers’ operating under Corporations law are not intended to be captured under the definitions or provisions in the New Aged Care Act. This clarification could be included in the Explanatory Memorandum to the final Bill,” it said.