In a wide-ranging interview with ifa on the sidelines of the AIOFP conference on Hamilton Island, Mr Bernardi – who defected from the Liberal Party in February to establish the Australian Conservatives party – said the current regulatory approach to financial advice has failed.
“The greatest form of governance is self-governance, and if advisers do the right thing and firms do the right thing, then everyone will benefit,” he said. “You’re never going to stop the rogues in this business, no matter how many rules and regulations you put in.”
Having been a stockbroker and self-licensed financial adviser in his life before politics, the senator said he has an understanding of business and the financial services sector that too many politicians lack.
Rather than introduce laws that hamstring all advisers, Mr Bernardi suggested the government focus on punishing wrongdoers instead.
Though he stopped short of announcing his party’s approach to specific regulations such as FOFA and LIF – explaining that specific policy platforms will be a matter for the party membership – he said he would commit to reducing red tape unlike his former colleagues in the Coalition.
“[The Australian Conservatives] have a deregulation policy,” he said. “I wish the government would bring back the deregulation days. There’s just too much compliance and the world is not better for it.”
Asked whether he was supportive of the government’s financial services agenda when he was on their benches, he said he was sometimes “critical” of the approach in within the party room but that in politics “you need to pick your battles”.
Two royal commissions
Though he talks a strong game on deregulation, Mr Bernardi has become an unlikely – if unenthusiastic – supporter of a royal commission into the banks.
“The big banks, I think, it seems there’s an inevitability about a royal commission into those now. I think it will happen,” he said.
When pressed about the Australian Conservatives’ policy regarding a royal commission, his answer was somewhat surprising given his traditional opposition to government intervention in the economy.
“It’s something I have never supported previously, but I find it hard to argue against given the money laundering allegations against the Commonwealth Bank,” he said. “The momentum just seems to be there now.”
Reflecting on a very different inquiry that has already been held – the Royal Commission into Trade Union Governance and Corruption, which was concluded in 2015 – Mr Bernardi said he does think the relationship between industry funds and the labour movement still requires further analysis.
“I do think it’s a problem,” he said. “The union movement is super powerful now and the funding within the industry super funds does find its way to union-supported causes in many respects. We know that money’s been misused within the union movement. The same with the industry funds.”
The senator also took aim at the government’s plans for an amalgamated dispute resolution scheme for the financial services sector, calling the creation of AFCA a “faux pas”.
Advice alliances
Commenting on the ifa article featuring a financial adviser calling on others join the Australian Conservatives, Mr Bernardi said he believes small business owners, particular in the IFA sector, are a natural ally.
He said he would be willing to “look at” the issue of ASIC’s section 923A clarification and champion the cause of independently-owned advisers, following a strong reception from delegates to the AIOFP conference, a number of whom have recently joined Mr Bernardi’s rank-and-file.
Asked whether the social and cultural side of his party’s agenda may turn off many prospective members from the business community, the senator offered a straight response.
“Look, I know it does,” he said. “I know there are people who don’t share the social views, such as [opposition to] same-sex marriage for example. That’s OK. You don’t always have to agree with your spouse let alone a political party.”
He suggested that business owners should ask themselves how many of a party’s policies it agrees with, and that they may find themselves more aligned to a cross-bench party than one of the two majors.
“If you’re with [a party] every three out of 10 times then that’s better than the alternative,” he said.
More broadly he called on people with business experience to engage in the political process rather than be turned off by the sometimes-toxic nature of its discourse.
“We need more people in politics that actually understand business and specific aspects of business,” he said. “Government should be a friend of the people, not its enemy. I don’t think it’s an ally right now.”
On a Day When Gov Announce a royal commission because of Banking cultural of Dog Eats Dog world of self-governance. he is calling for More self-governance.
Negative commentators need to use as their reference sources directly corroborated quotes. Not media spin. I have heard Cory Bernardi speak and he sounds nothing like what the media make him sound like with their skillful editing.
He clearly enunciated why the Banking Royal Commission may be necessary and the Banks themselves have basically stated in the last day that they agree with him. CBA money laundering, unintentional or otherwise, has caused uncertainty and a loss of confidence.
Red tape can have a purpose but all too frequently it has no purpose but as a smoke screen and the problem is left with no solution. The one size fits all complaints tribunal is an example of a smoke screen with no genuine solution except for publishable KPI’s about the overall outcomes and no review of the aberrant individual outcomes.
Deregulation would be a wonderful enhancement to our industry. Anthony you are so correct, Industry Super Funds need to be bought to account. Politicians know nothing about our industry yet even with their lack of knowledge and interest in our industry they make decisions that have far reaching impact on the business and our clients.
Brought (not bought) to account (im sure that’s finger trouble your end lol) I agree with your sentiments though, as with so many things our government get wrong, it is less about doing it right than just doing something.
That’s Government not government. and I’m not im…. just having a dig…no offence or offense..bugger i can’t spel either.
I like punish the wrong doers. Somebody in the industry does something wrong today, the whole industry is punished.
This guy is a creep of the highest order and hopefully does not represent the views of many, although I suspect he may reflect some in the Money Business and in particular, advice. And “Self-regulation” ??? Right…that’s bound to work. The whole point of regulation is that it’s an investment into the safety of all – even those being regulated. Getting rid of “red tape” is usually a dumb response. Our role is to make sure regulation is about transparency and to ensure that we always behave well, so that the “rogues” stand out like the sore thumbs they are. Cory is merely playing the obvious back the winner role on the Banking Royal Commission and he was against it until now. Not to be trusted – ever – to do anything that’s not absolutely in his own self-interest.
At least he stands for something. Unlike most politicians.
Finally we have someone who appears to get it. But unless folks like Bernadi have the support to influence thought on matters relevant to us, he appears to infer the circus of the fools we have in the
major parties will dominate. Therein while I appreciate he is on or at least infers he is on our side, the ssue is to be far broader in scope on a variety of policy. Sideshows aside, economic direction, less regulation or meaningful regulation is needed. Tax and business reform on a grand scale and respect for one another needs to be restored. The fools we have in office ( Labor and Liberal ) have played havoc with the Politically Correct thought bubbles, care more about their own power to have and hold office and political ideology. The rest of us do not matter it seems. The selling of Australia to foreign interests is also of concern. A broad focus on the removal of incomeptant politicians is in order. I for one would gladly take this on and not just for IFA’s but for a very sick nation such is Australia. All Australians deserve better than the fools we have in both political parties. Enough is enough.
Congratulations to Senator Cory Bernardi for his very call to have a deregulated financial services market.
As for a Royal Commission into the Banks, I would urge Senator Bernardi to push for it to include the Industry Super Funds. They are not being held to account at the moment.
if bernardi is the answer, then we’re asking the wrong questions