Former Citibank chief economist Stephen Koukoulas, who advised former Prime Minister Julia Gillard on economic policy from 2010 to 2011, said regulation of the advice sector had less to do with perceptions of the advice industry and more to do with safeguarding voters.
“From a politician’s perspective, they don’t want to see people losing money through poor investment advice, because even when it is not their fault, governments are often blamed when people lose any money,” Mr Koukoulas said.
“So with the regulation of advice…it’s not about politicians being out to demonise the industry, it’s about a blanket policy that stops people getting hurt, that’s what they are thinking when it comes to regulation.”
More broadly, the economist said Australia was entering an environment advantageous to professional financial advisers.
“With an ageing population and a compulsory superannuation system, Australians are increasingly going to need some form of professional advice, even self-managed super funds need external advisers,” he said. “Increasingly you must have advice and someone managing your money.”
“Financial services has recovered nicely from the [global financial crisis] and the future looks good.
“We are entering a low interest rate environment, not only with this rate cut – I think that is going to continue for some time – which means people need to think about low-risk ways of maximising their returns and an adviser can help with that.”
Mr Koukoulas will be speaking at the upcoming Wraps, Platforms and Masterfunds conference. For more information please go to www.masterfundsconference.com.au
Over the top legislation does not stop dodgy people. They will just be dodgy in a different way. They need to spend more money on monitoring via random audits (by qualified experienced and rational people) and less money making up and implementing onerous legislation that stops the honest adviser doing their job.
All the while being fully encouraged & supported to stifle the industry with compliance rubbish by the FPA. More study more courses more fees.
FPA members should be cancelling memberships in droves for this useless toothless body who deserted their members like a coward.
and I had a conversation with an alien yesterday who said that Kevin Rudd was an honest man. How much bull is this.
B Real, completely spot on. ISN is a power base, influence and revenue source for Unions/Labor and I never fail to spell that out to clients. Amazingly with such low levels of Union membership and the general disdain for Unions it has proved very fruitful spelling this out. Especially anyone in the health or construction sector. ISN has more to worry about than we do.
Reality? Motivated by a desire to funnel more money to the ISN who can then give more to Labor…
What rubbish! It must make him feel better to say it out load! If he tells himself that the Unions/Labor are great, then he can justify anything that forces the public to use the Union/Labor funds. Reducing competition and dumbing down the advice process is not a good thing. Great for Labor and the Unions though!
So the politicians retain their votes, the beauracrats getter fatter salary packages, The adviser is saddled with a greater, more complicated compliance & administration structure & becomes less productive. Meanwhile the most important person – the client has to pay higher fees. It’s like the carbon tax – the Government collect it, then employ beauracrats on fat salary paxckages to hand back a paltry slice to the aged & struggling. Doesn’t really seem right, does it?
Low risk and maximizing returns…..nice. If I put that in SOA I would be drawn and quartered.