Female advisor meeting with male client at hotel lobby

Australian regulators are taking measures to facilitate access to affordable financial advice for investors facing hardship due to the Covid-19 outbreak — while also stressing that they expect the industry to continue acting in the best interests of its clients.

In response to government action to allow investors that are in financial hardship early access to their pension funds (up to $10,000 this year and next year), the Australian Securities and Investments Commission (ASIC) introduced a set of temporary measures that aim to ensure that investors can get access to affordable advice about the government’s action.

To facilitate the provision of advice, ASIC will allow certain tax professionals to give advice without being licensed. The regulator is also reducing advisors’ relationship disclosure obligations and expanding the scope of advice pension trustees can provide.

ASIC’s measures are temporary and subject to certain conditions. There is a cap on advice fees, customers must solicit the advice and they must receive basic disclosure.

Additionally, ASIC is easing disclosure delivery demands — extending the deadline for certain disclosures from five days to 30 days — to help advisors meet the demand for time-critical advice.

“ASIC will conduct surveillance activities to monitor the advice provided under this relief, to ensure that advisers, registered tax agents and trustees are acting in the interests of their clients and members,” the regulator said.

ASIC has also provided further details on its shift in priorities during the pandemic, which includes delaying policy work and shifting to remote compliance monitoring.

It also said that it has stepped up market oversight and its efforts to ensure that investors are protected against manipulation, abuse, scams, exploitation and poor advice.

While the timing and process of investigations are affected by the pandemic, “enforcement action will continue,” ASIC stressed.

“ASIC recognises that participants in the Australian financial services sector are under enormous strain due to the effects of Covid-19. We also acknowledge that they are taking special measures to support their customers who are adversely affected. We expect them to continue to act fairly and in the best interest of consumers in these extraordinary times,” said ASIC chair James Shipton.

“To assist firms, ASIC will limit the regulatory activity that they will need to respond to as much as possible. We are also working with the financial industry to identify other areas where we can provide support,” Shipton added.

Shipton also noted that there is heightened risk of consumer harm and misconduct during these times.

“ASIC is being especially vigilant in addressing predatory practices, scams and fraud,” he said.