The government has announced plans to shut down the Financial Adviser Standards and Ethics Authority (FASEA) and transfer its functions to two other government units.
Legislation implementing these reforms will be introduced into Parliament by June 2021.
The closure of FASEA arises as a result of recommendations from the Financial Services Royal Commission which called for one single, central disciplinary body to be established for financial advisers. This is to reduce regulatory duplication in the monitoring of financial advisers and the financial advice sector.
Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume announced last month that the standard-setting aspect of FASEA will be transferred to the Treasury. Its remaining functions, such as exam administration, will be taken over by the Financial Services and Credit Panel (FSCP).
In response, the Association of Financial Advisers (AFA) and the Financial Planning Association (FPA) say the moves would help the industry address rising operating costs, part of which are due to increased regulatory compliance.
They say the proposed moves will mean better access to affordable financial advice for Australians, who have spurned professional guidance because of the prohibitive fees charged.