September 26, 2023

In its newest submission to the Australian Legislation Reform Fee’s (ALRC) Evaluation of the Legislative Framework for Firms and Monetary Providers Regulation, the Monetary Planning Affiliation of Australia (FPA) has instructed monetary recommendation laws are prioritised for transitioning to the ALRC’s proposed construction of the authorized necessities based mostly on thematic rulebooks.

The ALRC bundle of proposals goals to enhance navigability of the regulation and take away duplication beneath a brand new authorized hierarchy of:

  • Ideas-based laws
  • Scoping order – consolidated exclusions and exemptions; and
  • Thematic rulebooks.

FPA Chief Government Officer, Sarah Abood, says: “The proposal is consistent with FPA’s long-held place that the authorized obligations positioned on particular person monetary planning practitioners needs to be separated from the necessities that apply to AFS licensees and product suppliers.

“The continued dialogue between the ALRC, the FPA and the monetary providers sector extra broadly, continues to be a constructive demonstration of the ALRC’s willingness to know the extreme burden created by the present regulatory framework on all customers of the firms and monetary providers legal guidelines.”

She says the ALRC’s Evaluation enhances the High quality of Recommendation Evaluation (QAR) led by Michelle Levy, with each opinions contemplating equally very important and distinct components of the firms and monetary providers legal guidelines relevant to the supply of economic recommendation.

“Monetary planners are confronted with regulatory duplication created by each the construction of the legislative hierarchy and the obligations contained within the monetary advice-related provisions. This considerably and negatively impacts the affordability and accessibility of economic recommendation for shoppers.”

Abood notes that the Firms Act comprises duplicated necessities making use of to the person planner, both instantly or by way of obligations positioned on the licensee.

She says that each the ALRC and QAR opinions spotlight that duplications within the regulation exist on two ranges:

  • pointless repetition of an identical provisions akin to these recognized in Interim Report B; and
  • particular obligations positioned on the identical supplier by means of a number of functions of ‘like’ obligations, such because the monetary recommendation necessities on monetary planners.

“This duplication is made worse, because the obligations positioned on monetary planners beneath the Firms Act 2001 licensee obligations, and the Monetary Planners and Advisers Code of Ethics 2019, are closely influenced by the licensee and others who usually then apply further necessities to monetary planners.”

Abood says the ALRC bundle of proposals is important to the success of the suggestions of the High quality of Recommendation Evaluation.

“The monetary planning career has continued to cope with the impression of this subject in all components of working monetary recommendation companies and offering recommendation to assist shoppers beneath the necessities Chapter 7.

“We’re eager to see the ALRC prioritising suggestions referring to monetary recommendation in its Closing Report back to Authorities, and embody its issues for the implementation of its suggestions and proposed legislative hierarchy by Authorities, Parliament, and regulators.”