Retail investors have never had it so good in terms of the information available to them regarding investments and this doesn’t seem to be tapering off.
At the same time, the message of education is constantly preached by government, industry bodies and individuals. However, if the level of information available is at truly record levels, why is it still being churned out?
The obvious answer of course is there are new investors looking to invest, at different stages of life and for different reasons, at any one time.
The cut off point where information becomes education is beyond the scope of this column but education is an issue being constantly dealt with on many levels.
In the last edition of Money Management, mention was made of professionalism and the training now required by the Government under legislation and policy statements, which aim to have a consistent skill set across the industry – a uniform minimum education level.
At the same time that other government target – choice of funds in superannuation – seems to becoming less relevant by the day as the market leads the issue.
This is the centre of the whole education issue. Who drives the need for education and sets what will be the minimum standards?
The Government inadvertently got the ball rolling with the superannuation guarantee (SGC) which saw the public watch their balances increase and felt strong action was necessary to get the most from those funds.
This has driven the industry to a certain extent and no one is complaining about the growing interest in investments by the general public.
Yet the public have also demanded more from advisers. The push to designations such as the CFP is evidence that an educated adviser is crucial in today’s industry.
But somewhere the situation has been reversed. As a result, the industry is now dealing with some of the greatest changes in financial services legislation since the end of the Second World War.
Whether these changes are good is a debate best left to others but undoubtedly some deadwood has been cleaned out. However, at the same time, there has been the inclusion of issues such as Declared Professional Bodies and the Alienation of Personal Services Income.
As such, it is important that a third position is taken where neither government nor public, but the adviser industry sets the agenda. This puts the onus back on the adviser to be well educated, informed and compliant with standards set by the industry before the Government creates systems into which the industry needs to lever itself.
Creating this type of environment would give the public greater confidence in a professional, leading sector of Australian business, and removes the need to duly follow a bureaucratic path. Neither of these can be harmful to the industry.
