Stephen Jones

In Tuesday night’s budget the Federal Government allocated $2.7 million to a pair of reviews which will include an examination into managed investment schemes.

According to the budget paper, $2.7 million has been allocated to support reviews into MISs as well as for the review of the RBA.

Additionally, more funding will be provided to ASIC to fund the adviser exam, with user-pay fees only covering partial cost recovery.

Speaking during a post-budget brief hosted by the FSC on Wednesday morning, Assistant Treasurer and Minister for Financial Services, Stephen Jones, cited “property and property-like schemes” as a key focus.

Jones name-checked Sterling Income Trust as the “perfect example” and the scope will be about malfeasance rather than covering market risk.

“The CSLR puts in place a collective liability when things go wrong so we have to ensure it does operate as a last resort compensation scheme – it’s not the role of government to ensure investors against loss,” Jones said.

Jones said the review will cover the wholesale/retail threshold and the type of products being sold to retail markets.

“We want to have a look at that and to see if existing regulatory settings and oversight settings are right,” Jones said.

Switching the spotlight

Jones acknowledged there has been a spotlight on banking and advice but not product providers which this review seeks to remedy.

“We’ve had a spotlight on financial advice and we’ve done some pretty major regulatory reform across [advice, banking and credit], not all of it great and we’re having to revisit it,” he said.

Jones added there has been much government attention to the regulatory settings, including the current Quality of Advice Review.

“We’ve had a royal commission, several reviews and regulatory resets in both banking and financial advice and the superannuation sector,” he said.

“We’ve just come through five years of significant regulatory resets in a whole bunch of those areas.”