The federal government’s attempt to obtain greater understanding of Australia’s financial services sector has gained the support of a number of industry executives, though most believe further involvement is still required.
Industry reaction to roadshows held by representatives of Treasury has been mixed, with many suggesting concerns in response to the government’s Future of Financial Advice reforms are still being met with a lack of comprehension.
Professional Investment Holdings chief executive Robbie Bennetts said feedback from a Treasury session in Sydney indicated the government still had a lack of clarity regarding its stance on financial products.
Bennetts said notes handed to him from a session in Sydney claimed Treasury was “comfortable” for bank-based financial planners to have access to a single product, as the advisers would know their product well rather than those who had access to a wide range of products who might not understand those products.
“I know very well that Bernie Ripoll has stated that the fewer products advisers have to select from, the better they will know their product,” Bennetts said.
“Whereas [Financial Services, Superannuation and Corporate Law Minister] Chris Bowen’s view has always been there will be a range of products, and let’s just say that from the discussions I’ve had with the government that he believes a range of products is required to satisfy the fiduciary duty obligation that you’ve looked for the best product for the client.
“So I think there is still a little bit of work to be done by both parties there.”
AMP financial planning and advice director Steve Helmich said the sessions showed the government was listening.
“What is clear from the minister and the government is they are listening and there is a real sense of a collegiate approach here to find an outcome that suits as many people as possible with a strong customer focus,” Helmich said.
Dealer Group Survey principal Andrew Wheeler said the Treasury sessions gave a good indication the government was trying, though with proposed opt-in rules remaining unresolved it created challenges.
“The government has got to understand that a fool and their money will always get caught out,” Wheeler said.
“Greed and fear drive people and you’ve got a situation where you are making it impossible for the smaller member of the public to get any financial advice to enhance their knowledge and experience.
“So, you’re denying them the ability to easily get experience in these financial affairs and then you’re setting it up so that when they have finally gotten some money together, you’re then protecting them because they’ve got no background. They’ve just got to understand it’s not a nursery.”
DKN Financial Group chief executive Phil Butterworth said a new concern outside the reforms was the mood and morale of some industry participants.
“We’ve attended a number of different forums with Treasury. I have to say on the whole the industry represented itself fairly well at some of the public hearings, but we have had some feedback that some of our industry in regards to advisers didn’t really communicate in a very appropriate manner,” Butterworth said.
“The feedback was that other participants in the room were embarrassed and those people that behave in that manner are just polarising the view of government to address that type of individual in the way that they present themselves and therefore present the industry.”
He said it was important the industry did not just sit back and do nothing until 2012.
