Better Advice Act broadens ASIC’s regulatory responsibilities
2 November 2021
- ASIC’s responsibilities in respect of the financial advice industry will be broadened under the Better Advice Act.
- From 1 January 2022, the role of the FSCP will be expanded and ASIC will take on the administration of the financial adviser exam. From 1 January 2023 all financial advisers must be registered
- ASIC will continue to work closely with Treasury, FASEA and the TPB to ensure a smooth transition of functions.
ASIC’s engagement with the financial advice industry has been broadened with the passage of the Better Advice Act (the Act). ASIC will take on additional responsibilities as part of the efforts to strengthen consumer protections and streamline oversight of the financial advice industry.
The Act, commencing on 1 January 2022, will:
- expand the role of the Financial Services and Credit Panel (FSCP) by providing it with its own functions and powers, including powers to address less serious misconduct;
- wind up the Financial Adviser Standards and Ethics Authority (FASEA) and transfer the administration of the financial adviser exam to ASIC;
- introduce a single registration and disciplinary system for financial advisers who provide tax (financial) advice services; and
- require all financial advisers to be registered from 1 January 2023.
Financial Services and Credit Panel
From 1 January 2022, ASIC can refer certain conduct and circumstances regarding financial advisers to the FSCP for its consideration, and ASIC must do so in specified circumstances.
The role and powers of the FSCP have been expanded by the Act to enable it to address a broader range of circumstances, including less serious misconduct by financial advisers.
Each panel of the FSCP will be comprised of an ASIC staff member, who will Chair the panel, and no less than two industry participants. The pool of industry participants will be appointed by the Minister responsible for administering the Corporations Act.
Financial adviser exam
The Act winds up FASEA and transfers administration of the financial adviser exam to ASIC.
The Minister responsible for administering the Corporations Act will also be responsible for prescribing the format of the exam with consultation from Treasury.
ASIC’s planning for exam sittings in 2022 is underway, with the final exam schedule, registration timetable, and process for registration all to be outlined later this year.
The Act requires that all financial advisers who provide personal advice to retail clients about relevant financial products be registered by 1 January 2023.
Registration will occur in two stages. Stage one provides a one-off registration process administered by ASIC using the existing Financial Adviser Register.
Financial advisers who are registered with the Tax Practitioners Board (TPB) as a tax (financial) adviser as at 31 December 2021 will generally be deemed to be registered with ASIC under stage one.
Stage two commences once the Financial Advisers Register transitions to the Australian Tax Office as part of the Australian Business Registry Service (ABRS).
ASIC will provide guidance on registration later in the year.
ASIC is Australia’s corporate, markets and financial services regulator.