The last couple of months seems to have been consumed by work on the lobbying and advocacy front. We have been working alongside a number of other industry bodies, all of whom are seeking a more sensible suite of new legislation and regulation out of the current review of the Financial Advisers Act.

We were not impressed with the package of proposals put out by the Code Working Group. Overall, we felt the process seemed to have been somewhat captured by the makeup of the working party, and that small, independent adviser firms were facing disproportionately high additional compliance costs vis-à-vis the large players such as banks. We have, and continue, to make the point strongly that if independent advisers are pushed out of the system, due to ever-increasing compliance requirements, it will be the consumer at the end of the day that will suffer. Precisely the opposite result to that being sought by the review.

What is emerging across the Tasman is clear evidence that the focus needs to be on the behaviour of the large industry players, and the incentives they push into the system.

We hope a number of members will have made individual submissions but among many points the TripleA’s made, are a few below:

  1. The fact that they were likely to injecting confusion from the outset with the proposed use of the word “outcome” by focusing on “good advice outcomes”. Good advice was fine, but an outcome could be many years after advice had been given and is likely to be subjective at that point in time.
  2. That they should establish a single code applicable for all people (excluding robo advice) providing financial advice.
  3. That they should establish a single, base qualification for all people providing financial advice.
  4. That they should not establish a notion of “aggregate advice” as it would be impossible to police any idea of “combine expertise”. There would just be a sea of subjective debate as to what this might be at the firm level. No regulator would have the resources to be able to police such a notion and the system will simply just be “gamed”. This idea would be advantageous to large players but disadvantage small, independent adviser firms.
  5. Given the Australian experience, the review should move to plug the glaring omission of no whistleblowing mechanisms being suggested anywhere currently in the proposals.
  6. Give much better consideration to the large quantum of increased compliance costs that will fall on small, independent adviser businesses if the current proposals flow through to legislation/regulation.

The next cab off the rank is a submission on disclosure requirements, which is due on Friday 25 May!

I’d encourage members to have a look at the conference programme. The TripleA is supporting members’ attendance so get in quick. The Board will also be having its next meeting alongside the conference on Wednesday 20th June so it is a great opportunity to chat with the TripleA directors if you come along.

Wayne Smith

Chief Executive, TripleA Advisers Association

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