ALRC ought to prioritise recommendation laws: FPA

In its newest submission to the Australian Legislation Reform Fee’s (ALRC) Overview of the Legislative Framework for Firms and Monetary Providers Regulation, the Monetary Planning Affiliation of Australia (FPA) has advised 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 legislation and take away duplication beneath a brand new authorized hierarchy of:

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

FPA Chief Govt 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 companies sector extra broadly, continues to be a constructive demonstration of the ALRC’s willingness to grasp the extreme burden created by the present regulatory framework on all customers of the firms and monetary companies legal guidelines.”

She says the ALRC’s Overview enhances the High quality of Recommendation Overview (QAR) led by Michelle Levy, with each evaluations contemplating equally very important and distinct parts of the firms and monetary companies 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 customers.”

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

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

  • pointless repetition of equivalent provisions comparable to these recognized in Interim Report B; and
  • particular obligations positioned on the identical supplier via a number of purposes 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 typically then apply extra 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 Overview.

“The monetary planning career has continued to take care of the influence of this concern in all parts of working monetary recommendation companies and offering recommendation to assist purchasers beneath the necessities Chapter 7.

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