Treasury has announced that 2021 will see it take over the functions of FASEA. This move is intended to streamline the regulatory bodies who monitor the financial advice sector and also tick off another one of the Royal Commission recommendations.
Yesterday, in a joint statement, Senator Jane Hume and Treasurer Josh Frydenberg announced their plans to move the functions of the Financial Adviser Standards and Ethics Authority (FASEA) to form part of the Government’s Financial Services and Credit Panel. This move arises as a result of recommendation 2.10 from the Financial Services Royal Commission which called for one single, central disciplinary body to be established for financial advisers. We agree with this consolidation and believe that it is a step in the right direction and helps to reduce regulatory duplication currently involved in the monitoring of financial advisers and the financial advice sector. Giving the Financial Services and Credit Panel this role will avoid the need for another independent body and will instead give the Panel the ability to exercise the expertise they employ and further assist ASIC.
It is important to note that this does not mean the critical functions of FASEA, such as the educational and training standards and enforcement of the Code of Ethics, are going to be altered. These functions will instead be regulated by the Financial Services and Credit Panel and financial advisers should still ensure that they are complying with their requirements under these rules until further information is released.
At this stage, Treasury have stated that the standards and additional functions of the Financial Services and Credit Panel will be announced in early 2021, and the legislation for the reforms can be expected in the first half of next year.
The Government has thanked FASEA and all of the staff who have worked to introduce and improve the education, training and ethical standards in the financial advice sector.
If you have any questions or if you would like to discuss anything regarding these recommendations, please contact a member of our Financial Services Team.
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