Financial planners should brace themselves for a further period of political and policy uncertainty and possibly rue the lost opportunities of 2013-16, Mike Taylor writes.
As financial planners survey Australia’s new Federal political landscape, they may pause to ponder whether, for them, it really matters.
What the make-up of the new Parliament betokens for financial planners is another period of uncertainty but one which will not be very different from the uncertainty which has been a constant in the financial services industry for most of the past decade.
Indeed, in the past decade, financial planners have been witness to six different Prime Ministers, five different Treasurers, at least nine different Assistant Treasurers and multiple policy changes, tweaks and backflips.
And before anyone suggests that all the uncertainty was owed to political instability or minority Government, they should reflect upon the solid majorities won by Labor under Kevin Rudd and then by the Coalition under, Tony Abbott.
Perhaps, then, the financial services industry should regard the period between 2013 and 2016 as a wasted opportunity — a period during which a supposedly friendly and well-disposed Liberal/National Party Coalition Government fell short of delivering what the industry had hoped for and certainly fell well short on tempering the influence of the industry funds movement.
To be sure, there was a period of months during which it seemed the Coalition had succeeded in regulating for the dilution of the worst elements of the Future of Financial Advice (FOFA) changes but all of that unravelled in an increasingly fractious Senate and nothing acted to slow the momentum of the life/risk changes started by Bill Shorten as Assistant Treasurer and prosecuted by the Australian Securities and Investments Commission (ASIC).
Now, even while the Australian Electoral Commission (AEC) continues to count Senate votes, it seems obvious that the new Turnbull Government will have to accede to a Royal Commission into the banking and financial services industry — an exercise which will give rise to highly predictable theatre and outcomes but nonetheless create further uncertainty.
It is in these circumstances that the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) are right to focus on pursuing sensibly achievable objectives such as higher education and professional standards, together with constructive modifications to the Life Insurance Framework (LIF) outcomes.
The reality for the financial services industry over the life of the new Parliament is that it will be a comparatively low policy priority for a Turnbull Government which will spend most of its first 12 months figuring out how to work with a highly diverse Senate and most of its second 18 months contemplating when to call an election.
