Who proactively asks their software stack providers about security?
The results are in from ASIC's Cyber Pulse Survey, and the report has been released (12th November 2023). So much to unpack! One of the points they make is around supply chain risk. Without looking at the survey, I'm interested to know your thoughts on the percentage of advice firms that have already asked their software stack providers about the levels of security they have in place and can provide the evidence to show they did their DD. What percentage do you think have this on file?CSLR and the cost of Dixon Advisory
This week has seen a big focus on the CSLR, and particularly the cost to the financial advice profession - $18.6m in 2024/25. The underlying story is the issue of the Dixon Advisory business. At last count, there were 1,948 Dixon Advisory complaints sitting with AFCA. To put this into perspective, AFCA received just 600 advice complaints in the entire 2021/22 year across all entities and less than 500 (excluding Dixon Advisory) in the 2022/23 year. The 10 largest financial institutions in Australia need to pay for the complaints received up to 7 September 2022 (a total of $241m), and the Government and the advice profession share the cost of the remaining 310 cases. And when I say share, I should be clear, the Actuaries appointed by the CSLR suggest that the Government will pay 1 of these matters and the profession the rest. How unfair is that? That is another story! This actuarial firm have suggested that 95% of the Dixon Advisory complaints are likely to receive a payment from the CSLR. That is a remarkably high percentage, which draws me to the evidence in the firstAFCA Dixon Advisory case. The table on page 7 of this determination illustrates the percentage of related party products held by this client (between 54% and 74%). That is an incredibly high percentage. This case rests upon the issues of compliance with the BID and the client priority rule. Who would believe that it was possible to comply with the obligation to prioritise the interests of the client, when you are recommending such a high allocation to related party products? No one can have products that were that good, and the associates of Dixon Advisory certainly were not. That is why we have this CSLR mess. This brings me to my second point; should small business financial advisers be covering the cost of the CSLR when the problem was caused by the performance of the products of a related entity? Is that entirely or even predominantly an advice problem? I welcome your thoughts on all of this.QAR: does the first tranche cut it?
One notable omission from Treasury's draft QAR legislation is optional SOAs, which were originally going to be part of the first "stream" of reforms when the Government first responded to the review back in June. What do you think of the plan as it currently stands? The changes to fee consent, FSGs and advice in super are still included. How important to you (and your clients) was the SOA proposal?AMA: I'm Phil Anderson, GM Policy, Advocacy & Standards at FAAA, Ask Me Anything!
Have a burning policy question on DBFO or CSLR? Join me here onWednesday 31st July from 2pm to 2:30pm. With 12 years of experience in the professional association space working on the development and advocacy of major financial advice policy, I'm here to answer all your questions. Start popping in your questions below ahead of time and Ask Me Anything! Update: This AMA has now ended but please continue to pop your questions in thediscussion forums and make sure you tag me at Phil-Anderson The FAAA is holding a webinar on Tuesday 6 August at 12pm AEST to hear from AFCA and the CSLR about how the CSLR will work. Please click here to register.What has been holding up the adviser registration process?
Part of the Hayne Royal Commission recommendations was to add a new registration process for advisers. You might wonder why, given that we already had a Financial Adviser Register. Well this registration obligation contains more, including a fit and proper declaration. The primary hold up was a legislative change that the Government needed to get through first. The complication was that the Treasury Laws Amendment (2023 Measures No. 1) Bill 2023 also contained other stuff, including changes to franking credits and reforms in the TPB space. The Bill has been in the Parliament since February. It finally passed today after the Government managed to get the support of the cross bench in the Senate yesterday, through agreeing to a number of amendments. One of those amendments, which was put through by the Greens, limited who can sit on the TPB Board and introduced a breach reporting regime for tax practitioners (including a reporting of other practitioners obligation, just like financial advisers). The Parliament is very hot on issues that can be linked to the PwC scandal. The Government pushed this through without consultation. There are a number of very unhappy groups, and rightly so; legislative change should be based upon broad consultation and a careful considered process. That was certainly not the case with these amendments. Anyway the path is now clear for ASIC to push forward with the registration process for financial advisers.Your 2024 priorities
I don't know about you, but I've never been one for new years' resolutions. Time marches on without any regard for the promises you make to yourself on Dec 31st. That being said, there are already a number of important items on the 2024 financial advice calendar and I'm curious as to which of them you think will have the biggest impact on your business in the future. The most obvious one concerns the QAR – we're still waiting for the draft legislation covering the final tranches of the Government's QAR response, but Stephen Jones has indicated he expects implementation this year. Is this timeline likely or even feasible, factoring in the possibility of multiple consultation rounds? Looking at the other pins on the board, we have the adviser registration deadline on Feb 1st, the commencement of the CSLR in April and a range of ASIC enforcement activities – covering areas such as DDO compliance, erosion of super balances and cyber-security – highlighted in the regulator's 2024 priorities list released late last year. Beyond any other key regulatory dates, though, are there any important events you and your business will be focusing on in 2024? From your perspective, what does the year have in store for advice?What is your number 1 requirement when it comes to managing Client Correspondence?
There is no shortage of correspondence and communications between an Advice Practice and their Client. This can come direct from the client, from their accountant, from fund managers not to mention the correspondence created internally within your business. When it comes to managing these documents, there are many schools of thought around 'how to store' and 'where to store' this correspondance. From CRM solutions to Cloud Storage to internal servers to paper! So many factors need to be considered such as ease-of-access, security, cost to the business, and protection from theft or loss. When it comes to managing your client correspondence, what is your number 1 requirement (or top 3 if you can't narrow it down) and what drove you to pick your current method?FAAA on QAR/super incentives
In a recent submission, the FAAA criticised the lack of "specific encouragement provided for people to seek external professional advice that is not tied to a single product solution" in the Government's post-QAR roadmap. Obviously, the "product solution" being referred to there is super funds. This is a broader issue than the distinction between so-called "qualified advisers" and "relevant providers" (which I talked about here), given the FAAA's concerns about potential "bias and conflicts of interest" within institutionally-aligned advice providers. So I'd like to ask: do you envision there being a clear pathway for members to get external advice in addition to, or following on from, the advice they get within their super fund? If so, should the Government be more explicit about this in its proposals? And what do you think that pathway would look like?Will QAR go far enough?
A two part question for all our Advisely Experts and Board Members - with Minister Jones handing down the first part of the draft QAR legislation this week, do you think he'll go far enough to make a material impact for most advisers? And secondly, what's the one thing you think must get through? Tangelo Peter.Worn Alisdair.Barr Phil-Anderson Tamara.Morey Kim-Payne Fraser.Jack jessica.lamb
