The draft legislation introduces a single disciplinary body for financial advisers, with the Financial Adviser Standards and Ethic Authority (FASEA) now set to be wound up on 1 January 2022.
In its place, ASIC’s Financial Services and Credit Panel will be expanded to take on the new role as the disciplinary body, with financial advisers required to be registered by 1 January 2022. A one-year transition period will be provided before penalties are applied.
Once convened, the Financial Services and Credit Panel will be able to apply new penalties and sanctions to financial advisers found to have breached their obligations.
The draft legislation also acts on a key recommendation contained in the independent review of the TPB and will remove the requirement for tax (financial) advisers to be registered with the TPB.
From 1 January 2022, individuals who wish to provide tax (financial) advice must either be a registered tax agent or a financial adviser who meets the education and training standards under the Corporations Act.
Legislation will be issued to determine the degrees, qualifications, courses, work and continuing professional development required to provide tax (financial) advice services.
“This will provide welcome relief to tax (financial) advisers who are currently subject to duplicate regulation and oversight,” said Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume.
“These reforms simplify the regulatory framework governing the provision of financial advice by streamlining the number of bodies involved in the oversight of financial advisers, while at the same time strengthening that oversight to ensure that advisers engaged in misconduct are appropriately disciplined under one system.”
The draft legislation also sets how FASEA’s legislative standard-setting functions will be transferred to the minister, while ASIC will be placed in charge of the administrative standards functions.
Consultation on the draft legislation ends on 14 May. The exposure draft legislation and explanatory material are available on the Treasury website.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.