Increased Government regulation of the financial services sector is not the best way to improve the public perception of the industry, the Minister for Finance and acting Deputy Treasurer, Senator Mathias Cormann believes.
Senator Cormann rejected comments made by Financial Services Council (FSC) chief executive, John Brogden, that “self-regulation has failed” and the sector needed “Government and independent regulation”, to boost consumer confidence in the profession.
“It is a highly regulated area already,” Senator Cormann told the Senate yesterday.
“We need to ensure, as policymakers, that we have a robust but efficient regulatory system in place that is competitively neutral and, of course, ensures that people across Australia saving for their retirement and managing financial risks can access high – quality advice they can trust that is also affordable. “Now, I disagree with Mr Brogden’s call for more bureaucracy in this particular space, because more bureaucracy is not the answer.
“I think it is an absolute cop-out for Mr Brogden to throw his arms up in the air and say, ‘We cannot do more to provide leadership to the industry to ensure that we ourselves continue to lift professional, educational and ethical standards’.
“Of course, we are all in favour of higher professional, ethical and educational standards. But guess what: regulation ain’t going to be the answer to all of that.
“The industry itself has to do the heavy lifting, as well. To put up the white flag and say, ‘Sorry, but we cannot do it; you do it for us,’ is just wrong.
“The Financial Planning Association, the Association of Financial Advisers, the SMSF Professionals Association are all organisations that have shown great leadership in working hard to lift standards across the financial advice industry.
“I call on the Financial Services Council to do the same.”
