Regulation and the spectre of further reforms expected to be handed down to an already disrupted financial advice industry were top of mind for presenters during the opening of the Financial Planning Association’s Professional Congress on Wednesday in Melbourne.
Advice practice owners and practitioners from South Africa, the UK, Singapore and the United States offered their views regarding the impost of regulation to their Australian counterparts during a panel discussion moderated by CoreData’s Simon Hoyle at the Congress opening.
“Regulators don’t make a profession,” Phil Billingham, director of Perspective Planning in the UK said.
“We run a financial planning business and the regulation we deal with we deal with cheerfully, we know it’s there for the consumer protection, we also know that an elephant is a horse designed by a committee, and we get a lot of elephants,” Billingham said, suggesting the outcome of years of reforms and policy changes in the sector, not just in Australia but also overseas, has led to some unintended and cumbersome regulatory outcomes.
“What is the principal behind this is what I try to ask… what’s the regulator trying to achieve and how to I embrace that, because it’s going to steamroll me either way,” Janet Hugo, director of Sterling Private Clients based in South Africa, said.
Hugo noted that the policy makers in South Africa had cherry-picked regulation from all over the world and “created an elephant”. Hugo said she engaged a business coach to keep her on track with her business priorities and to help alleviate the stress of constant regulatory changes in her country.
During a year when the new government announced it intends to implement all 76 recommendations made by the Hayne royal commission and has empowered the regulator to take a ‘litigate first’ approach, the shared experiences of practitioners from other countries was welcomed by the 1400 Congress delegation.
If you spend a lot of time fighting it or saying ‘why me’, you’ll be wasting your energy… we can all get angry and it’s not fair, but saying that isn’t going to change it,” Hugo said.
FPA CEO Dante De Gori used the platform during the Congress opening to claim some public policy wins he said the representative body had this year.
In partnership with other associations De Gori said the FPA had successfully attained a one-year extension of the FASEA exam requirement and a two-year extension to the FASEA degree requirement. Senator Jane Hume, the Minister for Superannuation, Financial Services and Financial Technology announced an extension to the degree and exam requirements in August.
De Gori also said the FPA’s efforts advocating for changes to the FASEA Code of Ethics led to ASIC’s decision this week to grant facilitated compliance. “Specifically to the troublesome Standard 3,” he said.
“Believe me when I say we haven’t stopped fighting for appropriate implementation of these standards,” De Gori commented, acknowledging the at times heated criticism the FPA CEO has received for not making firmer public statements regarding some of the outcomes of the FASEA process. The FPA publicly called out FASEA for its guidance relating to Standard 3 in October.
Regulators may not make a profession but where I sit they’re the catalyst for one because that’s exactly what FASEA’s remit is. Originally the standards authority was given five years to develop and implement new standards after which, it was hoped the industry would regulate itself.
Fast forward to the Royal Commission and the misfortunate representation of certain AFSL’s, Advisers and Professional Bodies and it’s no wonder the govt have announced the establishment of a single disciplinary body.
That in itself is a good thing, paving the way for a profession to evolve without the hindrance of other stakeholders duplicating oversight and conflicts of interest to boot.
The other way to see it is that a profession does not need interventionist regulators so instead of complaining about regulation we should create the professional environment that makes the current level of external regulation unnecessary. As Mitchell noted in this session ‘regulation exists because irregularities abound’.
It constantly baffles me how Industry leaders can say it is a waste of time fighting the system, just get on and work with it.
The mortgage Industry had the opposite view and aggressively attacked the Royal Commission findings and the Regulators recommendations and the Governments stupid comments that they would proceed with the Royal Commission findings.
The result, was a back down from the Government.
The FPA and AFA did very little to stop the rhetoric and mis-truths, which led to the disaster we face today.
Retrospectively they have come out and started defending advisers, though they have not gone far enough.
If what the Regulators or the Government say is wrong, you attack their assumptions and do not back down.
The end result of what has been allowed to occur, has been total chaos, which is a disgrace and the FPA and AFA should be ashamed of their in-action from the start to have allowed this to continue.