Excessive regulation remains a burden on the financial services industry and requires a collaborative effort to untangle, according to the Financial Planning Association (FPA).

Speaking to the Australian Securities and Investments Commission's (ASIC) summer school, FPA Chairman Corinna Dieters said the Federal Government’s “bold experiment” in the Financial Services Reform Act achieved some pros, such as flexible regulation, but with onerous guidelines as an expense.

These had left planners dependent on the legal fraternity for advice to ensure compliance, she said.

“Of concern is when the regulator and the regulated treat the regulator’s implementation guidance of principles-based legislation as law,” Mrs Dieters said.

“An example of the impact this can have is the widespread concern generated as a result of ASIC’s recent enforceable undertaking, resulting in further review of business practices even though there was no change to the [Corporations] Act.”

The regulator and business community must work together to untangle “extensive subordinate regulation,” Ms Dieters said, particularly in striking a balance between market competitiveness and consumer protection.

She blamed a lack of meaningful co-operation between the regulator and business for exacerbating the problem.