Speaking at an event hosted by financial services public relations firm Pritchitt Partners in Sydney on Wednesday night, assistant minister to the treasurer Michael Sukkar admitted that the industry faces a high regulatory burden, opening up about the balancing act policymakers seek to tread.
“I take my hat off to you with the amount of regulation and things that you have to put up with,” Mr Sukkar said, directing his comments broadly at the financial services industry.
Asked by ifa to clarify the statement and whether he may have specific regulations he would like to see repealed, the seasoned politician did not take the bait.
“You know I can’t give you a personal answer on that, and this is really within the responsibilities of Kelly O’Dwyer, but that throw-away line I don’t walk away from,” he said.
“You are a highly regulated industry, many would argue rightfully so, and what we always need to do is balance the twin objectives of making sure no one talks about anyone who works in financial services like they talk about us bloody politicians; [and] engendering that respect and engendering that trust without killing the goose that laid the golden egg by just bombarding you with more regulation.”
Mr Sukkar did, however, accept that governments all too often get the balance wrong, though he stopped short of accepting responsibility on the part of the current federal government.
“Every time something bad happens, what do governments do? We say we’re going to come in and fix it; we’re going to remove all risk by bombarding ever more regulation,” he said.
“I don’t think that we’ve done that necessarily, but we’ve also got to be careful and we should always start from the premise that you are a highly regulated industry, and if we start at that premise hopefully Parliament won’t be so keen to just swamp you with more and more.”
The comments follow a decade of new legislation and regulations affecting financial advisers including FOFA, the Life Insurance Framework, the mandatory professional standards regime, multiple government inquiries and a soon-to-commence royal commission.
The majority of politicians are either lawyers or full time bureaucrats, and without an ever onstant need to fiddle with the system they would have nothing to do .
It is crazy that the same investment/insurance can be sold by a sales person (with a 2 day training course) over the phone in a 15 minute conversation under General Advice with no need to act in the client’s best interest and no fact find or SOA, as can be sold by a qualified Adviser who is forced through all the compliance rubbish (fact find, SOA etc) and best interests duty.
No one from any other industry could even begin to contemplate the ridiculousness of this inequality.
Level the playing field is the only way forward. All investment and insurance needs to be under one set of rules which includes the Best Interests Duty.
But we all know that this will never happen as then all the direct insurance policies would become redundant as they are expensive and have such poor terms that not even a unscrupulous, self serving, elitist like Kelly O’Dwyer could lie straight and say that they are in the client’s best interests.
I completely agree – what is needed is less regulation and more enforcement of the laws that are in place.
ODywer brought in LIF changes without having any formal review of the huge impacts brought in by FOFA to see if the changes were even warranted. How can changes the size and effect of FOFA especially through requirement of best interest not be given time to work. After this time surely there must be a process of formal and extensivelly review to see the impacts before making additional changes?
She is either incompetent or part of the cronyism to give a leg up to the banks and insurance companies.
Sukkar punch ?
Im just a professional form filler
Yes so what, what are you going to do about it instead of pay us lip service LOL
Tell us some thing new
Just makes me feel more like a sucker after reading this…!
It is too over regulated. I’ve always maintained good compliance which as achieved A results for 5-6 years running now (just going on current dealer group time I’ve been with them) but now it is actually to the point where I have to ask my clients to wait for their advice because I have too much to document and I can’t keep up. I also find the dealer groups aren’t keeping up with providing me with what I need. And friends who are great in this space are either out and never wanting to come back in or thinking its all too stressful and they are contemplating leaving. Something has to give here as its not in the public’s best interest at all.
Sadly, the regulator will never relax the rules. That would be admitting failure. Consumers will only pay so much for advice. Quality advisers will leave, and are leaving already. I’m not going to sit around churning out SOAs and ROAs for the rest of my working life either, even though i’d be one of the few who meet the education requirements of FASEA. Biding my time, then i’m out looking elsewhere.
O’Dwyer is just determined to wipe out the industry for the benefit of her insto buddies and future career prospects.
Unfortunately by not dealing with the real issues like vertical integration, advice based distribution and sales culture as well and unqualified advice to start with, despite massive amount of red tape the problems have kept occurring. Need to start again once education standards are in and provide incentives for non-conflicted advice by qualified experienced advisers such as full tax deductibility and a reduction of compliance requirements that would incentivise the right behaviors and save us all from drowning in regulation aimed at the lowest common denominator. .
ODwyer, pay attention to Michael Sukkar and cease your Over Complicated, Over Regulated ODwyer responses to everything.