Early election leaves industry in the lurch
It is now nearly a month since the Prime Minister, Julia Gillard, announced that the 2013 Federal Election would be held on 14 September – and despite her suggestions to the contrary, campaigning has proceeded apace.
And while it may not have occurred to the Prime Minister or the Minister for Financial Services, Bill Shorten, it is becoming increasingly obvious that the election/political cycle has actually overtaken the legislative cycle and added to the confusion being felt in both the financial planning and superannuation industries.
The simple fact of the matter is that while the Government’s Future of Financial Advice (FOFA) legislation has passed the Parliament, the loose-ended nature of those laws is such that the planning industry will not really know what it is dealing with until the Australian Securities and Investments Commission (ASIC) delivers the consequent full suite of legislation.
Similarly, the superannuation industry is operating on the basis of expectations around the Government’s Stronger Super policy rather than legislative and regulatory reality.
In circumstances where many planners have found themselves having to make key decisions about their business futures, this is simply not good enough.
Nor is it good enough that the superannuation industry is having to plan its operational expenditures around outcomes that are surmised rather than definitely known.
While it would be very easy to point the finger at ASIC for the prolonged timetable around the delivery of the FOFA regulations, this would be entirely unfair.
The manner in which the Government has approached the development and delivery of the FOFA legislation has meant that delivery of the operational reality has been left to ASIC which, not unnaturally, is moving cautiously and consultatively on a number of the key issues.
Of course, none of this helps financial planners or others in the industry who are trying to plan their futures. Many are being asked to make key commercial decisions without actually knowing the detail of ASIC’s final approach to conflicted remuneration or grandfathering.
It is hardly surprising, therefore, that there exists a cohort of planners who are simply doing nothing - or very little - based on their belief that, ultimately, the election of a Coalition Government will obviate the need for serious change.
With the substantive elements of the FOFA bills having passed the Parliament, and with the minister simply canvassing additional elements such as restricting the use of the term ‘financial planner/adviser’, it is hardly surprising that the industry is paying more attention to the utterances of ASIC deputy chairman Peter Kell than it is to that of Bill Shorten.
Irrespective of which side of politics wins Government at the next Federal Election, the current administration’s handling of the financial services portfolio has, at best, been shabby.
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