Speaking at the FPA Congress in Sydney on Wednesday, Mr Costello told the audience of mainly financial planners that if public opinion turns against them in some way, regulators such as ASIC are going to feel they have to do something.
“Regulators are not immune to public opinion,” Mr Costello said. “They will do something, and the regulatory response might be way over the top, so it’s better sometimes to deal with these things early and get them out of the way.”
Mr Costello said he wishes Australia had regulators that were totally immune to public opinion, but we don’t because we’re operating in a democracy.
“They read newspapers. They’re under pressure from parliamentarians. They’re under pressure from the parliamentarians’ constituents,” he said.
“If something’s gone wrong, people are going to say, and legitimately say, what were the regulators doing. And you know what they’re going to do, they’re going to try and then look for some heads.”
Because no one is feeling under any need to reduce regulation, Mr Costello predicts there’s unlikely to be any reduction in regulation from bodies like ASIC any time soon.
“Probably not in your lifetimes,” he said. “Because they’re under pressure. Parliament feels under pressure. Everybody feels under pressure, and so people say you’ve got to act.
“So what does a Parliament do? The Parliament’s got to act and the Parliament passes laws. It might be bad laws. It might not change anything, but at least they’ve done something, right? This is the way the world works.
“I don’t think it’s good on them. I’m not saying it’s a great system. You know me, I tried to simplify taxation on superannuation. I think I got it right. How long did it last? Not long. It changed.”
As a result, Mr Costello said advisers are unfortunately going to have to live with this, which is going to be more costly for both the adviser and their clients.
“Which is going to be ultimately more costly for society, which is really just a demonstration of how when trust goes, costs rise, unfortunately,” he said.
Yeah right! plenty of public opinion out there about the legal, real estate,political, accounting & motor industries all with serious issues so why just Financial planners being pushed through new standards that can’t possibly fix ethics ???????????????????
Bring back Simpler Super Mr Costello but also limit annual tax free super pension income to $100K pa (indexed) and then tax marginally over that.
It’s hard to believe that your seat is now run by Over Bloody Complicated O’Dwyer with the worst changes to Super ever. The utter arrogance of O’Dwyer to spring the 2017 changes on the Industry with zero consultation is why we have the current Tech heavy, Admin heavy, complex Super mess.
O’Dwyer – you are an absolute SHOCKER !!!!!!!!!!!!!!!!!!!!!!!!!
Wrong Peter, they are immune to public opinion. One wonders why there has been ZERO action by the regulators to date given the data they have been given over the years and being exposed by the R C. After the final recommendations come out, I doubt there will be any management within the regulators or the banks held accountable. Sterile management is the cause of the problems and it appears all advisers will pay the price. I bet it all flares again in years to come due to continued inaction by regulators and bank management believing the mighty dollar over rules all. Lets see if any meaningful action results from the R C and prove me wrong.
Sadly, he is right. Public outcry fostered by media-without-fact-commentary plus a siege mentality leads to poor outcomes. RC puts more pressure on ASIC/APRA and by association, parliament. Public want to trust their adviser yet have no real idea of what the adviser has to do vs what they see in their reality. FASEA is one example. A genie does not get back into the bottle and the three wishes were used up a long time ago – low tax on savings; SOA’s; compulsory super contributions. These actually helped clients. The rest? mmmmm.
Cosi is the best Prime Minister, Australia never had. One could argue, some of the current mess is an outcome of Peter not being given the opportunity.
I keep hearing people say “you have to live with this…”. This is not true, I have a choice. This is a democracy and this ensures I have a choice. I can choose to walk away and clients who have invested and trusted me for many years right up to their retirement will have to start again with someone new. If they can find someone. The consequence of me and others walking away is that a significant portion of clients who chose to work with finiancial advisers who have always done the right thing will be left I advised. We as a public have seen what happens to claims when there is no adviser involved. We have seen what happens to superannuation reviews when a bank is involved. Throwing advisers under the bus for not doing reviews? Tell the truth and admit that new business generated higher returns for the bank. Doing reviews has never been a priority for bank management and therefore they focussed their sales force on the bigger prize.
It seems I might get a few credits for all my industry related qual’s so I may be around a little longer. But the image of our industry has been tarnished by the big end of town. Now if only we had a union or regulator or something like that that could expel these numoties…oh yes, we actually do. But who will the (over) regulate in the light of all this evidence? History shows that it will be the innocent. Clients and honest advisers will face the brunt of it while bank management and the regulators collide over breakfast, lunch and dinner as to how to sell the “slap on the wrist” which will be coming their way…