Simplify Regulatory Changes to Reduce Adviser Fatigue

Regulatory change for advisers has, regrettably, become more of a constant than the exception. But with the minister's QAR reforms laid before us, a concentrated period of change looms.

The release of key parts of the Delivering Better Financial Outcomes reform package last month by Financial Services Minister Stephen Jones has focused AFSL holders' attention on the changing regulatory landscape yet again.

These reforms are open for consultation and the government expects to progress the legislation by the end of 2024.

Change is ongoing and needs to be managed appropriately. AFSL holders need to consider what impact these reforms will have on their business.

Advisers can sign up for updates from the various regulators through each regulator's website. There are several services that provide updates to help AFSL holders stay up to date on regulatory change, which usually have a monthly subscription fee.

AFSL holders need to:

1. Be aware of regulatory changes


2. Assess what impact, if any, the changes will have


3. Plan for the implementation of the changes and any transition periods


4. Implement the changes

AFSL holders are expected to be compliant with regulatory changes from when they are implemented. Many firms only start considering the changes when they have already come into effect. This is too late. Don't get caught not having appropriate arrangements in place to comply with financial services laws. This may be a breach of an adviser's AFSL obligations.

Change does not happen by itself. For larger advisory firms with the benefit of an in-house compliance officer/team, the transition to a new regulatory regime is usually captured, communicated, considered and implemented by the required date, however for smaller operators the task falls on each individual's shoulders.

Our advice to this cohort is clear: get it done, and keep it simple. Don't over engineer a new process. Consider what needs to be done and then implement it. Document the changes, whether this is updating policies or procedures, making changes to templates or checklists, or leveraging technology to streamline processes.

There is much to come from the government, particularly on Best Interest Duties, simplifying SoAs and removing the safe harbour provisions.

The existing obligation to act in the best interest of the client still exists and conflicts stay at the heart of the standards. The principles of appropriateness and fit for purpose remain. The delivery of scaled and limited scope advice should be clearer. This would ensure the quality of the advice meets consumer needs.

Keep the information current and prominently date every change on website documents. Ensure the Financial Services Guide is prominent on the website and up-to-date and that hard copies are identical to the website as well as being readily available.

Regrettably, a process that could have been a sprint or middle-distance run has morphed into a marathon, so simplicity is a key to survival. MIntegrity Navigate regulatory changes smoothly with our expert guidance to prevent adviser fatigue and ensure compliance in financial services.

Contact seller Share