Speak now, or......
The time is rapidly approaching when views on the proposed financial services legislation have to be presented.
The Financial Services Legislation Amendment Bill (FSLAB) has been promoted in priority and has passed its First Reading.
The First Committee Stage Hearing will follow and submissions on the current Bill have to arrive by 23rd February.
Now is the time for the Adviser voice to be raised and to present a reality check for the benefit of consumers.
1. Sales are not included within the remit of FSLAB – they should be included.
2. Sales v Advice demarcations are not included – they should be included
3. Solicitors and Accountants are exempted – they should be included.
Finally, it is anticipated at some stage, in accordance with the best principles of regulatory stewardship that a Regulatory Impact Statement will be prepared.
Leaving sales beyond the reach of the legislative review leaves the Consumer open and vulnerable to unscrupulous activity. The idea of a sales conversation with a consumer where that consumer is NOT in some way, shape, or form, persuaded or recommended to buy as a result of the conversation is improbable. It is therefore imperative that sales are fully embraced by the legislation to provide optimum consumer protection.
Defining the sales activity, as against the provision of advice, is an essential and natural corollary of the previous point raised. Again, for the consumer to be properly served, the distinction between the two activities must be defined, declared, and disclosed. Too often in the past, institutions have obscured sales behind the cloak of advice, and created less than optimal outcomes for consumers.
The recent extension of the AML/CFT provisions should be mirrored in the pending Financial Services legislation. Financial advice, wherever offered, and by whomsoever, should be consistently governed by legislation and regulation that informs and confirms to the consumer that all who offer financial advice are subject to the same obligations and standards. Lawyers and Accountants are no different and should be subject to the provisions of the FMCA as amended.
That’s my 10 cents worth and a formal submission along these lines will be sent in good time.
In all the recommendations for online writing a “call to action” is recommended.
Please take this as a call to action – speak now or forever hold your peace.
All the best for a successful 2018.