AFA News 22 April 2021. In December last year the Government passed the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020, which included a number of elements that will impact financial advice, including a requirement for AFSLs to include an authorisation to assist with insurance claims, a new breach reporting regime, and reference checking requirements. At that time, there was some concern expressed about whether financial advisers needed to vary their licence to include an authorisation for claims handling. We were aware at that time of the possibility of a regulation excluding financial advisers, and therefore encouraged members to wait and see what emerged.
Earlier this year, the Treasury issued a draft regulation for consultation. The AFA made a submission, identifying a number of issues and seeking a range of changes.
We are pleased to announce that the Government have released a regulation that will provide an exemption for financial advisers from the need to vary their AFSL in order to provide claims handling. This regulation provides an exemption for individually licensed advisers and authorised representatives. It appears to meet the needs of the small business financial adviser population. Whilst the regulation does not specifically refer to staff members of financial advice practices playing a role in claims handling, we were pleased to see that this was specifically referred to in the explanatory statement.
Issued 22.04.2021. AFA Policy & Education Update