Money Management – Politics, planning, power and people
Three developments in recent weeks point to an elevation of the financial planning industry onto the national political stage.
Prior to the current hive of activity among various lobbies within the financial planing industry, Canberra has not been a focus for the industry since life agents mounted a massive campaign over commission disclosure nearly eight years ago.
Certainly the funds management, life insurance and banking sectors have all had a major presence in the nation's capital. The funds manager's victory with the collective investment vehicles exemption from Ralph tax reforms is testament to that sector's skill in gaining the attention of the people that matter in Cabinet and Treasury.
The first development was the spectacular submission by First Samuel managing director Anthony Starkins to the Senate Select Committee on Superannuation and Financial Services arguing for a legislatively backed ban on commissions. While the Senate Select Committee is not formulating any specific legislation, representations by the industry could be very influential on legislation developed further down the track.
The second development is the intense pressure being applied by the Financial Planning Association to sway the Federal Government for an exemption for financial planners on the alienation of personal income issue.
The FPA has embarked on a letter writing campaign and has had face to face meetings with some of the top power brokers in Canberra to win support for the cause.
Which leads to the third development. Incoming FPA chief executive Ken Breakspear has told Money Management that the FPA will step up its lobbying efforts in Canberra. Nothing concrete has been planned as yet, but the strategy is a clever one.
The alienation of personal income issue caught the industry unaware, or some may say snoozing. It seems nobody knew the legislation was coming or nobody knew that it would have such a major impact on the financial planning industry. The industry now faces a huge uphill battle to change the Government's mind on this question. Treasury and the tax office are very reluctant to allow exemptions once legislation is drafted. However, if the industry had known beforehand, the story may have been very different.
This is not the fault of the FPA or any other figure within the industry but it may reflect badly on the industry's position in Canberra. Breakspear's strategy to boost the FPA presence in Canberra should be applauded. It may mean that next time the industry may not be forced to back-peddle so fast and furiously to overturn legislation.
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