Minister for Superannuation, Financial Services and the Digital Economy Jane Hume said the draft legislation will strengthen oversight of financial advisers while simplifying the regulatory framework governing the provision of financial advice, helping to reduce complexity and cost for advisers. 

“This is part of the Government’s ongoing commitment to ensure Australians have access to affordable and high-quality advice,” she said.

“The draft legislation expands the role of the Financial Services and Credit Panel (FSCP) within the Australian Securities and Investments Commission (ASIC) to exercise the functions of the single disciplinary body for financial advisers. 

“It proposes to create new penalties and sanctions to apply to financial advisers found to have breached their obligations and introduces a new annual registration system for financial advisers.”

Further streamlining and supplementing the new disciplinary system, the draft legislation will also implement Recommendation 7.1 of the Independent Review of the Tax Practitioners Board (TPB), by introducing a single disciplinary and registration system for financial advisers who also provide tax (financial) advice services. 

The government stated the draft legislation removes the requirement for tax (financial) advisers to be registered with the TPB, and ensures relevant tax experts are appointed to the FSCP to hear disciplinary matters that involve tax-related advice.

“This will provide welcome relief to tax (financial) advisers who are currently subject to duplicate regulation and oversight,” Ms Hume said.

The draft legislation also implements the Government’s announcement last year that the Financial Adviser Standards and Ethics Authority (FASEA)’s legislative standard-setting functions will be transferred to the Minister administering the Corporations Act 2001 and its administrative standards functions transferred to ASIC.

“These reforms simplify the regulatory framework governing the provision of financial advice by streamlining the number of bodies involved in the oversight of financial advisers, while at the same time strengthening that oversight to ensure that advisers engaged in misconduct are appropriately disciplined under one system,” Ms Hume added. 

The exposure draft legislation and explanatory material are available 2021on the Treasury website, with consultation submissions due by Friday 14 May.