The Morrison Government has today passed the Financial Sector Reform (Hayne Royal Commission Response-Better Advice) Bill 2021 (Better Advice Bill) and has fulfilled its commitment to implement recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
This legislation is another step forward in implementing the recommendations from the Hayne Royal Commission and introduces important reforms to strengthen consumer protections while streamlining oversight in the financial advice industry.
From 1 January 2022, the Financial Services and Credit Panel within the Australian Securities and Investments Commission (ASIC) will become the single disciplinary body for financial advisers and will be able to hear complaints about an adviser’s compliance with the financial services laws and the Code of Ethics. The panel will be chaired and assisted by ASIC, and made up of members of the industry appointed by the relevant Minister. Peer review will therefore be the primary channel through which misconduct is assessed and sanctioned.
The legislation also introduces new registration requirements for financial advisers to improve accountability and increase transparency for consumers when accessing financial advice.
Consistent with recommendation 7.1 of the Review of the Tax Practitioners Board, the legislation removes duplication for financial advisers who provide tax (financial) advice by ensuring they are only subject to one disciplinary and registration system.
The legislation also transfers the functions of the Financial Adviser Standards and Ethics Authority (FASEA) to the Government to reduce the number of bodies involved in the oversight of financial advisers. ASIC will be responsible for delivering the financial adviser exam.
The legislation gives the Government the power to extend the cut‑off date for certain existing financial advisers to pass the exam. The Government will use the power to extend the cut‑off date to 30 September 2022 for advisers who have attempted the exam twice prior to 1 January 2022.
The Government would like to thank the FASEA Board and its staff for the work they have undertaken in setting professional standards for the financial advice industry and the important contribution towards improving the education, training and ethical standards in the sector.
The Morrison Government is committed to continuing to improve the regulatory framework applying to the financial advice sector and ensuring that Australians can get access to affordable and high-quality advice.