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Financial Planning
Advice reforms to be legislated: Hume

After having previously been placed on hold, the single disciplinary body for financial advisers and the compensation scheme of last resort is set to be legislated by mid-2021.

Speaking at the 2020 Association of Financial Advisers Vision Conference this morning, Senator Jane Hume said the government agreed with the Hayne recommendation for the single disciplinary body and believes it will encourage greater professional discipline in the industry.

"We are working through the detail and we intend to introduce the legislation by mid-2021," she said.

Furthermore, Hume said the government's forward-looking compensation scheme of last resort, is also set to be introduced in mid 2021.

"This is a substantial step in rebuilding trust in dispute resolution," she said.

"I look forward to hearing from you all when consultation resumes on the single disciplinary body and compensation scheme of last resort measures."

Hume went on to say financial advisers are a key part of the economy and will be critical in the recovery and that she and the government are listening to advisers' concerns.

"I am working to address your biggest concerns. I'm constantly looking for opportunities for red tape reduction, identifying obstacles to productivity and profitability and reducing the burden on your industry and participants," she said.

The single disciplinary body, Hume said, will assist with these opportunities and will be a "game changer".

"We have been listening to what the AFA wants and what the community wants. We want to make sure there is far better alignment of the regulatory requirements and legislative requirements," she said.

Hume referred to the current array of organisations and requirements as an "involuntary colonoscopy" as advisers are overburdened by compliance.

"We are hoping there a fewer of them and a clearer path for expectations," she said.

Further to this, she said she is optimistic about the future of the financial advice industry as 900 students are currently enrolled in FASEA-approved degrees.

By 2026, Hume said financial advisers will have completed an approved exam, hold a bachelor's degree and undertake mandatory continuous professional development.

"The reforms are working their way through the system and I'm confident the standards will ensure consistency across the industry and all financial advisers have the skills necessary to provide high quality advice," she said.

Read more: AFAAssociation of Financial AdvisersJane Hume
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