Government is just trying to keep up: Ripoll

The former chair of the Parliamentary Joint Committee (PJC) on Corporations and Financial Services Bernie Ripoll has revealed how his view of the financial services sector was altered by the public hearings that his committee undertook nationally.

He further told delegates to the Professional Planner Dealer Group Summit in the Blue Mountains that the industry had left government with little choice when it came to legislative reform.

Challenged by one delegate to justify why compliance is “this government’s answer to everything”, Ripoll said human nature was at the heart of a regulatory response.

“People will do what people do,” he said. “As soon as we create a regulation, someone will think of a way round it.

“You can’t expect governments to be ahead of the game in terms of regulation, we will always lag behind.

“In effect, we respond to failure. We allow you the freedom to … create and innovate, we are supporters of innovation, and as we detect a problem or a problem arises, we meet that challenge.

“The evolution of regulation is based on this very principle. We are just trying to keep up.”

While the inability of the financial advisory industry to self-regulate over the past ten years is now widely accepted, Ripoll was clearly moved by the individual accounts of those testifying in front of his PJC committee.

“Some of the sad, personal stories … for me were incredibly profound,” he said.

“There seemed to me this sense was created that markets only went one way. There was this whole concept of zero risk.”