Both Chartered Accountants Australia and New Zealand and the SMSF Association said they were hopeful that consolidating FASEA and ASIC functions would help reduce the regulatory burden for both advisers and accountants.

Speaking in a recent podcast, BT head of financial literacy and advocacy Bryan Ashenden said this announcement by the government follows one of the recommendations by the Hayne royal commission that a single disciplinary body be established for financial advisers.

“The government previously gave its commitment to this measure, and abandoned a previous process for the establishment of code monitoring bodies. Since then, responsibility for monitoring an adviser’s compliance with the FASEA Code of Ethics has sat with licensees,” Mr Ashenden noted.

The FSCP, he said, currently supports ASIC in the exercise of its regulatory functions with respect to the making of banning orders against individuals for misconduct, and will have its role expanded to take on this new responsibility.

“Expanding the role of the FSCP will leverage its extensive expertise and existing governance structures, avoiding the need to establish a new body to perform this role,” he said.

“Further, the government stated that consolidating this new function within ASIC will also avoid regulatory overlap and minimise the possibility of multiple investigations by multiple agencies into the same conduct related to the provision of financial advice.”

While the winding up of FASEA will reduce the number of regulatory bodies currently overseeing the activities of financial advisers, Mr Ashenden said advisers shouldn’t expect a dramatic change in education requirements and standards for advisers.

“While there have been some calls in the past for FASEA to be wound up, with some expressing frustration at the standards development processes, I would caution against thinking that the world will be different into the future,” he warned.

“In noting the cessation of FASEA, the government acknowledged what FASEA has achieved to date and this change should be considered as part of a consolidation, or streamlining approach, not as an admonishment of FASEA.”

Mr Ashenden also pointed out that there have been no announcement or indication that the FASEA Code will change.

“There is no announcement that the exam requirements or timetable will change. There is no announcement of changes to transitional education requirements,” he stated.

“In fact, it would actually be unfair to change these items at this time while we work through the transition. When looking to establish baseline requirements, you need to maintain the baseline, not change it.”

Legislation to give effect to moving FASEA responsibilities to the FSCP and the Treasury, he said, is intended to be introduced into Parliament in the first half of next year.

“While not stated, a likely effective date could be around 1 July 2021 given FASEA has been funded up to that point,” Mr Ashenden said.