Promoting access to affordable advice for consumers
On 17 November, ASIC released Consultation Paper 332 Promoting access to affordable advice for consumers (CP 332).
CP 332 seeks input from industry participants and relevant stakeholders to help ASIC understand:
- the issues and impediments relating to the supply of good quality affordable personal advice; and
- the practical steps that can be taken by ASIC and industry to improve consumer access to good quality affordable advice.
A particular focus of this paper is on promoting access to quality ‘limited advice’ and ASIC is keen to receive feedback on the impediments to providing affordable and limited advice.
As part of this consultation, ASIC is also seeking input on what can be done to make the example statements of advice (SOAs) in RG 244 and RG 90 more helpful.
Submissions to CP 332 are due by 18 January 2021 and industry participants are invited to provide feedback online at this link.
Reference checking and information sharing protocol
On 19 November, ASIC released a consultation paper seeking feedback on a new reference checking and information sharing protocol for financial advisers and mortgage brokers following the introduction of the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 into Parliament on 12 November.
In addition to the draft ASIC Protocol, ASIC has also prepared a draft information sheet to help licensees understand their reference checking and information sharing obligations.
Consultation on both the draft ASIC Protocol and the accompanying information sheet is through Consultation Paper 333 Implementing the Royal Commission recommendations: Reference checking and information sharing (CP 333).
Industry and other interested stakeholders have until 29 January 2021 to provide feedback.
Information sheet for insurance claims handling
On 27 November ASIC released a draft information sheet on insurance claims handling and settling following the introduction of the Financial Sector Reform (Hayne Royal Commission Response) Bill 2020 into Parliament on 12 November.
On passage of the Bill, persons providing claims handling and settling services will need to be covered by an Australian Financial Services (AFS) licensee, and general conduct obligations under section 912A of the Corporations Act 2001 will apply.
Entities that already hold an AFS licensee will need to apply for a variation to their license, so it covers the new financial service of claims handling and settling.
The draft information sheet:
- sets out who needs to be authorised to provide claims handling and settling services for insurance products and who can act on an AFS licensee’s behalf
- explains how and when to apply for an AFS licence, or variation to an existing AFS licence, including materials that are needed to support an application, and
- refers to existing regulatory guidance on how to meet the general obligations under section 912A of the Act and indicates how the obligations may be tailored to claims handling.
ASIC expects to start taking applications for AFS licenses, and variations to existing licenses, from 1 January 2021 (subject to passage of the Bill).
Consumer remediation guidance
On 3 December, ASIC released Consultation Paper 335 Consumer Remediation which outlines proposed updates to Regulatory Guidance 256: Client review and remediation conducted by advice licensees, and clarifies RG 256’s application to all financial services licensees, credit licensees and superannuation trustees.
Submissions on CP 335 are due by 26 February 2021. ASIC will then release the draft guidance (informed by the feedback received during this consultation period) for a second phase of consultation.
ASIC has also released Making it Right: how to run a consumer centred remediation, a resource that offers immediate help to licensees with the day-to-day design and execution of consumer-centred remediations. This guide draws on ASIC’s on-the-ground experience with remediations and lessons from behavioural science. It does not set new legal obligations.