Reflecting on the strong wealth management business growth reported by the Commonwealth Bank and AMP recently, Instreet Investment managing director George Lucas told InvestorDaily competitiveness is essential to raising the exportability of the financial services sector.
“While the government is saying it wants to turn Australia into a financial services hub, it is not really backing that up. The reverse is happening and Australia as a financial centre is becoming less competitive with other markets because of loss of innovation,” Mr Lucas said.
“A lot of the regulations of the industry have reduced competition in the industry – not just the movement of independent advisers to the major bank and AMP dealer groups – but also in the fund management industry.
“We’ve seen a lot of innovation leaving the fund management space and also the super fund industry. We know that APRA [Australian Prudential Regulation Authority] has clearly said it wants funds to merge.”
Mr Lucas said that rival markets in the Asia Pacific region are implementing public policies that are more conducive to a globally competitive financial services sector.
“In Singapore, the government has a very keen eye on growing as a financial services hub – particularly private banking – and Hong Kong also,” he said.
“You don’t really have that policy objective in Australia at the moment. The political brief at the moment is how to regulate the industry.”
Since taking responsibility for financial services in Prime Minister Kevin Rudd’s ministerial reshuffle, Treasurer Chris Bowen has indicated on multiple occasions that the Johnson Report objective is a personal policy priority – both in a speech to the National Press Club and later that month in a speech to the Financial Services Council annual conference.
Former Gillard government economic adviser Stephen Koukoulas also threw his support behind the Johnson Report goal.
“Australia does have a wonderful reputation globally for high quality and sophisticated financial services and financial products, especially the innovation in the treasury area of financial markets, and retail banking as well,” Mr Koukoulas said.
“These services could be increasingly exported; there is a growing demand in Asia in particular, where, for example, mortgage markets are emerging and Australia has considerable expertise.”
Stephen Koukoulas will be speaking at next week’s Wraps, Platforms & Masterfunds Conference in the NSW Hunter Valley. For more information, go to www.masterfundsconference.com.au.
