Financial services lawyer Emma Johnson told ifa the government is unlikely to make any significant reductions in regulations any time soon as it continues to prioritise consumer protections.
“The government has to balance their risk to consumers with the ability for individuals to get more advice, so it is a bit of a balancing act, and I do think that protection of consumers is likely to always win out in that regard, particularly, as the historical issues are not actually all that far in the past,” Johnson said.
She also noted that some of the “rogue advisers” that led the government to implement more stringent regulations on the profession are likely still actively working as advisers, making the government warier when it comes to loosening the reins.
However, Johnson also questioned the effectiveness of the regulations in stopping those who would do harm.
“The controls that are in place at the moment, I don’t know if they are necessarily helpful in that regard, because if you’re going to do harm to people, you’ll find a way to do it anyway. If your intentions are not good, no matter how many laws are in place, you’ll go and break them anyway,” she said.
While advisers have undergone considerable changes over recent years in order to increase their professionalism and remove many who had misbehaved in the past, Johnson believes they will continue to wait for any significant reductions in regulations.
“I see both perspectives. Advisers have increased additional qualification and experience requirements to meet, with that comes increased professionalism in the industry, and I think we will certainly see that take effect,” she said.
“I mean, it already is, but we’ll see the knock-on effect of those advisers being more professional, I suppose, and the provision of their advice, which will make the industry more trustworthy and reliable.
“So that will automatically help the industry, I suppose, in that way, and with that will come trust of others as well, government, whatever, and they may well relinquish some of the controls they’ve got over the industry in time.”
Furthermore, Johnson noted the significant amount of time it takes for the government to make changes and come into play as another factor dragging out the process.
“The problem with easing these burdens is the amount of time it takes. So as you can see with the tranche two, we haven’t had that released yet, even though it was promised some time ago. So it just takes forever to create change in the industry,” she said.
“I think it will take a while for more to happen.”
She suggested that, while the profession waits for a reprieve, they should just “keep the client front and centre”, and ensure they are providing good, holistic advice, “then the compliance gets not as painful from there”.
While the Delivering Better Financial Outcomes (DBFO) bill is set to reduce some of the onerous obligations for advisers, particularly tranche two, which is expected to see the removal of the safe harbour steps and a significant reduction in the SOA requirements, among other things, Johnson believes this will not provide the amount of relief advisers are calling for.
Johnson added: “Yes, the government could do more. When or how they could do that is more the question.”
agree with previous comment – exactly what “rogue” advisers are still out there advising and if that’s known why aren’t ASIC dealing with that as they should? Absolute drivel this and from another lawyer no less…clients aren’t less protected if you change opt in to opt out so there are plenty of changes or retractions that could be made that have ZERO impact on consumer interests – they simply remove red tape and admin…
i’m so relieved to have quit the advice industry a few months ago.. relieved!
The real crooks are the TPD lawyers charging $176,000 to submit a TPD Insurance claim form that only costs $1000 in time. The lawyers are the real problem. There is over 90,000 practicing lawyers vs a pittance of only 15,000 advisers left. Its time for retail advisers to stop the lawyers destroying our industry
A lawyers opinion can be taken with a grain of salt. They are a large part of the problem
This has nothing to do with consumer protection. The purpose of the charade is to corral retail advice into industry super and to decimate the external advice network.
Until lawyer-created ANNUAL Fee Renewal Form Red Tape (Corps Act Act 962F – 962H) is completely struck out, legislation that does NOT exist in any other nation, the QAR changes will fail to substantially solve the retail advice shortfall crisis. QAR PLUS elimination of the ANNUAL Fee Renewal Forms is the only workable solution to bring back cost-affordable financial advice to over 2 million Australians currently without service support.
Those Rogue advisers doesn’t she mean super fund and banks that forced their advisers to follow their process which resulted in bad out comes similar to Dixon….. and giving the super fund and bank a free ride will result in the same out comes
It really has been a while since I have read this much twaddle.
“She also noted that some of the “rogue advisers” that led the government to implement more stringent regulations on the profession are likely still actively working as advisers, making the government warier when it comes to loosening the reins.” On what (rational) basis is this even being said. On what evidence ?
Actually just an appalling Finance minister. Worse than O’Dwyer and Hume and that is saying something
It’s most often such a complex and timely process to provide advice to a client. You have a client who just wants help with investing $100,000 and you can’t justify doing the work and charging appropriately while meeting compliance requirements. It’s a bit ridiculous really.
Not all non-professionally qualified advisers are crooks. However, the vast majority of crooks are non-professionally qualified.
Do you have any actual evidence to support this?
Not this argument again. Back it up with some figures please. I think you’ll find you can’t.