Posted June 14, 2018 09:02:17 Financial advisers have to put up with more than $40 billion in new fees and charges from online training courses that are not listed on their websites.
The move to create a new regulatory framework for the industry comes after the Federal Government revealed it was working on a new framework for financial advisors to help protect their investments from rogue online courses.
But the Federal Treasurer, Scott Morrison, said the new regulations would not apply to financial advisers who “do not accept a fee payment as a part of the agreement to be offered”.
“That’s a distinction that we’ll make as we develop this regulatory framework,” Mr Morrison told ABC News Breakfast.
“And I’ll make sure that it does not, at any stage, impact on the existing structure.”
He said the regulations would also apply to “other providers that may be providing a service that’s not being regulated by the Financial Conduct Authority (FCA) in the same way as we’re regulating online banking.”
Mr Morrison said the move was part of a wider effort to protect Australians from the risks of “unwarranted” online marketing.
He said he was “committed to ensuring that Australians get the best possible financial advice available to them, and to ensure that people can access the advice they need when they need it”.
“We have been committed to providing a consistent approach to online advice for years,” Mr Morgan said.
“So I’m confident that our regulatory approach will be the same.”
Mr Morgan told ABC Radio’s 7:30 program that he had asked the FCA to examine the way the regulatory framework was being developed.
He did not say whether it was a request for further information.
The FCA said it was reviewing its regulation and the regulatory impact on online providers.
But it did not provide further comment.
“The regulator is taking this opportunity to review the regulatory approach to providing online financial services to the Australian public, and the FACA has been engaged in that process,” a spokesman for the regulator said in a statement.
“This is an important step in the process to ensure the regulator can respond effectively and fairly to all stakeholders, including those who are not regulated by ASIC.”
Online courses are an emerging industry in Australia, with a number of companies offering courses online, including Wealthfront and Wealthfront Australia.
In December, the Federal government announced it was introducing new rules for online banking services that were to be made mandatory for new entrants to the market, with online payment provider Wealthfront agreeing to pay $US2 million ($2.4 million) to settle its legal action with the FCO.
It said it would now work with its competitors to ensure they did not have “any material advantage over the Government”.
The Government is also launching a regulatory scheme that will see all new entrants, including small and medium-sized businesses (SMEs), required to pay fees of $US1,000 per month for the first year, with subsequent fees rising to $US3,000.
This was a major win for online financial advisers, who have long complained that they are not being adequately regulated.
The regulations were unveiled in March and have since been passed by the Senate.
Topics: financial-services, business-economics-and-finance, australia First posted June 14.