Submissions

FINSIA’s response considers the ‘key functions’ set out in the draft Regulator Rules as part of the materials concerning the proposed Financial Accountability Regime, released by APRA and ASIC on 20 July 2023 (and further explained in the accompanying materials).

FINSIA believes there are practical benefits of legislating an objective for the superannuation system including providing certainty for individuals when saving for their retirement and improving the direction to trustees in respect of their duties in governing superannuation funds. FINSIA supports an objective that includes a purpose around equity. This will help ensure that further changes to the superannuation (and retirement income) system will support disadvantaged and less represented groups to maximise their superannuation (or retirement income) benefits.

Given the global nature of business in Australia, it is important to align our climate reporting requirements with international practice on climate related financial disclosure. Any obligations for climate related financial disclosures that are developed in Australia should align with the reporting requirements currently under development by the International Sustainability Standards Board (ISSB) when they become available for jurisdictional adoption.

Broadly speaking, FINSIA agrees that it is appropriate to review the IFM at this point, given it has been in place since 2017. 

While it is our opinion that the current model which ensures ASIC’s regulatory activities are paid for by those creating the need for regulation rather than taxpayers is appropriate and should continue, it is also our view that aspects of the current system need to be reviewed. 

Broadly speaking, FINSIA is supportive of the direction in which the proposals are moving as part of this Review. It is essential, in our opinion, that the Review continue to reflect on the current design of the policy and regulatory framework that surrounds financial advice in Australia, and to advance recommendations for reform that will deliver to consumers more affordable and accessible financial advice. In our opinion, the full suite of recommendations put forward in the Proposals Paper should, on balance, deliver to consumers wider access and improved affordability of financial advice.

In our view, the paper appropriately captures the central issue relating to the under representation of access to Capital for Māori, and also the relative percentages by which that under-representation is evident. The paper also captures the problem of securitising small size assets that Māori own. One observation is that the paper misses the history of why Māori are under-represented in the business space. In our view, this was driven by a 40-year government strategy (post WW2 to the 1980s) that has, in essence, subsidised Māori to move from country provinces into the metropolitan areas for (typically) low-skilled employment opportunities. This strategy was underpinned with low-cost housing through the state, which ultimately meant that Māori did not have the property asset base to loan against when they went into businesses later in their working life.

Supporting New Zealand’s economic stability – Review of the RBNZ Monetary Policy Remit. Thank you for the opportunity to provide a submission in response to the Reserve Bank New Zealand consultation paper on Supporting New Zealand’s economic stability and for giving us a brief extension to finish this submission.

An ongoing Joint Associations Working Group (JAWG), comprising representatives of key financial services industry and financial advice professional associations, prepared this submission for the Quality of Advice Review (Review). The JAWG recommends the Quality of Advice Review focus on these key themes and embed them into the regulatory landscape, to overcome the accessibility and affordability issues impacting the provision of quality financial advice for consumers, customers and clients.

As noted in FINSIA’s 4 February 2022 submission as part of the development of the Terms of Reference for this Review, we believe that this process represents an important opportunity to identify and acknowledge the benefits of professionalism, alongside the equally important roles of professional education and standards, in addition to the role of professional bodies.

In our view, there is considerable merit in exploring how the regulatory model of oversight for financial advisers can be evolved in a way that seeks to mirror other existing regulatory oversight models which currently exist in respect of other professionals within our market. Perhaps the most relevant, and most prominent, model worth considering is that which currently exists within the accounting profession in Australia.

FINSIA welcomes the opportunity to comment on the ALRC Report A Financial Services Legislation - and suggests that frequently the cause of customer harm and dissatisfaction is the application of rigid policies when the application of professional judgement is needed.