Yes, financial advice needs to be regulated differently says ALRC
Financial advice is different and deserves its own chapter within the Corporations Act, according to the latest update from the Australian Law Reform Commission (ALRC).
The latest interim report clearly proposes that “The Corporations Act should be amended to restructure and reframe provisions relating to financial advice”.
The ALRC is proposing “the creation of a single legislative chapter bringing together all the provisions that only regulate financial advice”.
“This restructure seeks to reflect the needs and expectations of users of the law, and thereby enable the law to communicate more effectively,” it said.
“A single legislative chapter focused on financial advice would also better reflect the fact that Parliament has, over a number of years, sought to professionalise the financial advice industry, raise standards above those generally applicable to other financial service providers, and improve advice outcomes.”
“Users would find it difficult to identify this context in the current structure of financial advice provisions,” the ALRC interim report said.
In doing so it represents a substantial endorsement of the position put by the major financial planning groups, including the Financial Advice Association of Australia (FAAA) and the SMSF Association.
The interim report states that the current structure and framing of financial advice provisions make the law harder to understand, by obscuring the broader context and purpose of financial advice provisions.
“This is principally because the fractured structure of provisions — spread across the Act with no indication as to where they are to be found — obscures the context and purpose of each group of provisions,” it said.
“The lack of context means that the law fails to communicate that advice providers are subject to a highly developed and tailored regulatory regime. This regime contains fundamental norms and expectations that differ in purpose and substance from the more general provisions regulating financial services.”
“In other words, financial advice is regulated differently to other financial services.”
…which is why the ‘regulation’ of Financial advisers nneeds to be principles based and simplified in a (workable) Code of Connduct…
Bang on, 100% correct.
It also needs to be not under the Corps Act and NOT regulated by ASIC. I’m done with the keystone cops. Get someone in who knows what they are doing like a professional standards board staffed by actual practitioners who understand the complexity of the advice landscape, not conflicted and idealist academics and idiotic bureaucrats who have never paid a commercial rent or someone’s salary and think more paperwork means more productivity.
What does “raise standards above those generally applicable to other financial service providers” . To whom are they referring?. More accountants in jail than people on the FAR. Maybe bank loan jockeys? Mortgage brokers-really!!!!,