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Minister flags action to cut red tape burden on advisers

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The Federal Government says it is aware of advisers’ concerns over the cost impact of regulatory reforms and is considering ways to ease the burden to support the provision of affordable financial advice.

“I want you to know that I am listening and I am taking on board what you’re saying,” Assistant Superannuation, Financial Services and Financial Technology Minister Jane Hume said last week in an address to the Association of Financial Advisers’ (AFA) virtual conference.

“I am working to address your biggest concerns,” Ms Hume said, adding she is “also constantly looking for opportunities for red tape reduction, identifying obstacles to productivity and profitability, and reducing the burden on your industry and its participants”.

She says the Government has a “vested interest” in ensuring advisers can provide professional advice to as many Australians as possible “without being tied up in red tape”.

Many peak bodies such as the AFA have in recent months warned advisers are struggling under the weight of rising compliance costs, forcing them to raise fees. This has in turn made it more expensive for Australians seek professional guidance.

AFA GM Policy and Professionalism Phil Anderson says it is “fantastic” that the Government is thinking about red tape reduction.

“We’ve got a sense there is an increasing awareness of the issue,” Mr Anderson told insuranceNEWS.com.au. “The challenge is what is the best way to solve it.

“We are of the view that the issues are quite substantial. What needs to be done to achieve an outcome where the cost of financial advice is more accessible to everyday Australians will require more substantial re-egineering of the advice process.”

In her speech Ms Hume said the Government is also committed to raising the standards of the industry through new professional requirements and implementing proposals made by the Hayne royal commission.

The Government intends to introduce legislation by the middle of next year for a new single disciplinary body for financial advisers. The disciplinary system is one of the Hayne royal commission’s recommendations.

“It’s a significant step,” Ms Hume said of the measure. “The Government agreed with the recommendation and we believe the body will streamline and encourage greater professional discipline in the industry.”

Legislation for a forward-looking compensation scheme of last resort – another proposal made by the Hayne royal commission – is expected to be introduced by the middle of next year.