Policy changes have been coming in thick and fast in recent weeks. In a roundup of what’s changed and what’s still to come, we consider what these announcements mean for financial planners and the direction policy reform is taking.

The latest announcements from ASIC and the Federal Treasurer Josh Frydenberg have brought some relief for financial planners managing a growing workload thanks to both regulatory reform and the COVID-19 crisis. Here’s a brief summary of recent changes most relevant to FPA members:

Treasurer announcement 21 May 2020: Stamping fee exemption

In a recent announcement, the Federal Treasury will extend the ban on conflicted remuneration to include stamping fees on Listed Investment Companies (LICs) and Listed Investment Trusts (LITs). The ban is expected to take effect on 1 July 2020.

This is a welcome announcement as it is expected to bring the Senate closer to passing an omnibus bill which includes legislation to extend FASEA deadlines for exam and education requirements. The delay in passing the education extension has put pressure on some FPA members who are expected to meet these requirements under difficult circumstances.

In February 2020, FASEA introduced a remote proctoring option for financial planners to sit the exam at home, with supervision from an independent invigilator. For financial planners preparing to take the exam, this option will allow them to do so during the ongoing COVID-19 crisis.

Treasurer announcement 8 May 2020: Royal Commission recommendations

To allow the financial services industry to focus on supporting customers at this challenging time, Federal Treasurer Josh Frydenberg announced a six-month delay in implementing the recommendations of the Hayne Royal Commission.

Legislation the government had indicated would be introduced into parliament by 30 June will be delayed until December this year. Rules on annual fees charged by financial planners were to be included in this round of legislation, as were changes to the sale of superannuation and insurance products.

Measures scheduled for legislation by December will be deferred to 30 June 2021.

In the meantime, the FPA will be continuing our advocacy with the Government to help ensure these reforms are implemented carefully and with a view to reducing red tape and supporting financial planners to deliver quality, affordable advice.

ASIC announcement 14 April 2020

In mid-April ASIC announced a number of temporary measures and delays to improve access to financial advice for consumers impacted by COVID-19. These include:

• As a temporary measure, allow advice providers not to give a Statement of Advice to clients when giving advice about early access to superannuation. There is a $300 fee cap on providing this type of advice.
• As a temporary measure, extending the time period for giving a time-critical Statement of Advice to 30 days after the advice is given
• As a temporary measure, financial planners can provide a Record of Advice to existing clients if their personal circumstances have changed as a result of the COVID-19 pandemic. This also applies for clients who see a financial planner from the same AFS licensee or practice.
• The ongoing review of life insurance advice and changes to grandfathered commissions have been deferred. ASIC still expects product issuers to turn off grandfathered commission arrangements no later than 1 January 2021 and for all rebates/fee reductions to be passed on to consumers as soon as possible.

More from ASIC on these relief measures

A focus on access to advice

At the recent FPA Together events, our team have been seeking feedback from members on whether the ASIC relief measures announced in April are making things easier, for them and their clients. Members did talk about the many clients who have welcomed the economic stimulus measures offered by the Federal Government, but it’s too soon to know if these changes are being taken up by financial planners and are having the desired result of making advice more accessible to consumers.

However, the FPA advocacy team can perhaps take heart from this renewed commitment to accessible advice seen in these relief measures from ASIC. This could be reason for hope that the FPA’s new five-year policy platform Affordable Advice, Sustainable Profession will be a welcome contribution in the policy reform debate.

“These recent ASIC initiatives are directed at consumers and ensure they are able to access the advice that they need in the current crisis,”  Chief Executive Officer. “They seek to balance the access issue (e.g. relaxation on SOA requirements) with consumer protections (e.g. cap of $300 on super advice). The policy platform shares a focus on consumers, both in terms of access to advice, but also on consumer protection. The balance is critical.”