Speaking to ifa, New South Wales Nationals Senator John Williams said he is concerned about the corporate regulator and about the financial planning industry more broadly.
“I do worry about this industry,” he said. “I worry when we have $1.5 trillion in super, a lot of it now self-managed.
“Many Australians are going to rely on good, honest advice for their futures and we need to have that industry clean and honest and the customers best interests must be the priority.”
Senator Williams anticipated bipartisan support on the issue of whether to hold an inquiry into ASIC’s handling of the matter, which shows conduct in the financial advice industry is now on the political agenda.
The notice of motion followed revelations in the Fairfax media that ASIC had received information from a Commonwealth FP whistleblower in October 2008 and had not acted for 16 months.
“How much more wrongdoing was carried out in those 16 months? How many investors were overcharged and perhaps even had signatures forged?,” the Senator asked.
The motion to have an official parliamentary inquiry into the matter will be voted on in the upper house today.
It seems that the issues at the CBA, like many other institutional advice businesses, stem from the fact that the advisers there don’t have enough ‘skin in the game’ or enduring responsibility.
Slapping a multi-million dollar fine on the CBA might wake management up but it won’t hit the pocket of the employed adviser – they’ve earned their bonus.
I work hard to keep my clients happy knowing that they will come back to me for more of my advice one day. In fact some clients are third generation.
If an adviser is employed (Bank, Union Fund, whatever) they tend to move from one branch/department to another from year to year. New clients are continually served-up from internal referral arrangements with little incentive to build long term relationships.
When I retire – I will need to keep run-off PI in place – does an employed adviser need to?
The problem is that draconian regulation has, for honest advisers, increased costs and therefore the fees needed to recover this cost. Meantime when crooks or sloppy large corporates fail to comply, the policeman is asleep at the wheel. In my view the issues at CBA/CFP appear to have been systemic. To really send a message to the industry the AFSL of CBA/CFP should be suspended indefinitely until they provide a full and detailed submission as to how they will manage all conduct in their business in future. Until then all advice operations and ongoing client fees should be suspended. These people made $6 billion dollars profit in the last 12 months, a fine of one or two hundred million should wake them up, not a silly little slap on the wrist and a “enforceable undertaking”. Punnish them with the only thing they care about and understand LOSS OF PROFIT.
I thinl politicians of all persausion have forgotten the old parable “People in Glass Houses should not throw stones.” With our papers filler with comment about Thompson, Slipper & others.
You don’t need a sledge hammer to crack a walnut!
@mark I think Unions represent more grass-roots Australians than business, which are motivated only by profit. And how is it self-serving or bad for business to spend money on fundamental education reforms. Are the disabled and the environment reforms self-serving? These are all long term issues – rather than short sighted tax breaks for the rich? BTW Senator Williams ia a National….
Senator I worry about my country & how a self-serving Govt run by the unions has been allowed to destroy businesses, industries, budgets for ALL Australians except them & their union mates.
Further, your quote “Many Australians are going to rely on good, honest advice for their futures and we need to have that industry clean and honest and the customers best interests must be the priority.
Shold read “ALL Australians should be able to rely on honesty in Govt for them & their childrens futures & we need Govt to be clean & honest with the best interest of the country the only priority”
Look in your own backyard champ!
the Inquiry as raised in the Senate is not into the industry but into ASIC.
Following is from Hansard 19/6/13:
“That the following matter be referred to the Economics References Committee for inquiry and report by 31 March 2014:
The performance of the Australian Securities and Investments Commission (ASIC), with particular reference to:
(a) ASICs enabling legislation, and whether there are any barriers preventing ASIC from fulfilling its legislative responsibilities and obligations;
(b) the accountability framework to which ASIC is subject, and whether this needs to be strengthened;
(c) the workings of ASICs collaboration, and working relationships, with other regulators and law enforcement bodies;
(d) ASICs complaints management policies and practices;
(e) the protections afforded by ASIC to corporate and private whistleblowers; and
(c) any related matters.”
Great – another review, and some more regulations. That will surely fix it.
here we go again…
Why don’t you senators raise concerns about misconduct in your own industry, for example the gross misspending of public money, or questionable conduct on other politicians such as Crag Thomson, Richard Face, Milton Orkopoulos, Carolyn Hirsh, the list goes on. Ah I guess you already did that and quickly brushed it under the carpet and allow them to continue. But if a financial planner does same, banned for 7 years and removed from the industry. Hypocrites, the whole lot of you are!
Like ASIC with Storm, the good senator seems to have also been enjoying a good sleep and missed the whole FOFA and Best Interest debate…..
Thanks Senator Williams for your concern, it is a shame that I don’t have the same rights as you to elicit an inquiry.
Most Australians receive good, honest advice with their best interest evident for their futures.
I wonder some times if the shoe isn’t on the other foot, all voting Australian should expect “good, honest” representation & service from their elected officials.
Have a look at their track record.