In its report on ‘adviser education and professional standards’, the committee outlined its reasons for opposing a move to an individual licensing system for financial advisers, arguing the current system has sufficient checks and balances in place.
“The committee is of the view that the dual oversight of an adviser by a professional association (with the power to advise ASIC to suspend or ban the adviser for breaches of the code of professional conduct) and ASIC through the AFS licence provisions will provide accountability for individual conduct,” the report states.
It adds that FSI recommendation number 24 – that ASIC be given the power to ban management for not “creating a culture of compliance with [AFSL] provisions – should be implemented in order to provide “additional defences” in the system.
The report also says, however, that the door to individual licensing should be left open if the current system of ASIC oversight of licensing organisations and self-regulation by industry associations is not successful in raising standards.
It also responds to ASIC’s call for a hike in fees for licensees to be introduced in order to better reflect the “cost of regulating financial advice activities”.
The PJC formally recommended that “the government consider proposals to increase fees for organisational licensees to reflect the scale of their financial advice operations, in the context of a broader review of ASIC's fees and charges”.
