Policy changes to support financial industries, advisers in time of COVID-19 crisis

Amid the public-facing stimulus measures, like discounted childcare, there have been some measures put in place to support the financial advisers and planners who are on the front lines with people who are panicking about what's happening with their retirement savings.

It wasn't an overnight change but something that had been in the works for some time. That said, the CEO of the Financial Planning Association of Australia (FPA), Dante De Gori, welcomed the changes. "It's great to see progress made during the last few months. A lot of Australians are finding themselves in a financial situation they have never experienced before. During these unprecedented times, people are hungry for professional assistance and certainty in making decisions about their personal finances."

Many of the changes proposed by ASIC are about extending timelines for a sector that is being overwhelmed by client contacts. For example, time critical provisions are being extended from five to 30 days for new and existing clients seeking advice due to COVID-19. Additionally, existing clients may be excepted from receiving a SOA who are coming in due to COVID-19.

"This is a good step in the right direction by ASIC and provides welcome regulatory relief around providing advice and the Statement of Advice to Australians in financial need," says De Gori. "Our members have been telling us that the cost of regulation and time constraints have become a major issue while servicing their clients who just need professional support at this time."

ASIC has also proposed limiting advice fees for things like early access of superannuation and allowing a simpler record of advice (ROA) in place of a statement of advice.

Most recently, AFCA announced that it will provide a nine-day extension to consumers, small businesses, and financial services firms to respond to complaints. Considering how surprisingly hectic and stressful we're all finding the "new normal," it's a welcome change. Previously, the window for response was 21 days. It has been increased to 30.

APRA to delay policy rollouts

Six prudential and reporting standards that were set to be rolled out this year across a variety of industries will be delayed by anywhere from several months to a year.

For Banking, the APS 220 standard regarding credit risk management and its exposure to related entities will be delayed until 1 January 2022. It was set to begin at the beginning of 2021.

Those who fall under CPS 234, regarding information security, may be able to apply for a six-month extension. It was set to begin on 1 July of this year.

While ARS 222, which covers exposure to overseas banking and insurance, has been delayed, APRA says that organisations should not be actively increasing exposure without consulting APRA.

Other affected prudential and reporting standards will be amended and updated soon.