RC will force regulation, but less is more
The consensus across industry experts is that a post-Royal Commission world will involve complete and full disclosure, but more paperwork and onus on the institutions won’t work, a panel has told Money Management and Super Review’s Future of Wealth Management conference.
The experts said while the Royal Commission was much more consumer-orientated than it was originally thought to be, whether consumers were aware of the compliance burdens placed on institutions was “another story”.
“It’s more paperwork into the system … and none of it protects the clients,” added Steve Davis, chief commercial officer, Infocus.
“Somehow, regulators need to understand that less is more, but unfortunately that won’t come out of the Royal Commission.”
When asked if industry funds got off lightly, AustralianSuper group executive, Paul Schroder, said people had forgotten the human impact on those involved.
“The only message I’d like to convey is don’t forget the human impact on the people in this broader financial services industry of this Royal Commission,” he said. “If you’re involved directly its exhausting, and if you work in an institution that’s involved, it challenges and upsets your confidence.”
But other panellists thought they had, with Grahame Evans, managing director, GPS Wealth, telling the conference that industry funds didn’t receive the intensity of interrogation as the other institutions.
David Murray, CEO of Sterling Private Wealth, said industry funds were fortunate because of where the Royal Commission directed its attention in its early stages.
“I think the order has been quite deliberate,” he said.
The experts were hesitant to place onus on the regulators though, with Evans telling the conference that regulators have had to “battle hard” and negotiate against “some really high power”.
Annick Donat, CEO of Madison Financial Group, said it was unfair to judge the regulators against the Royal Commission.
But, all the experts agreed the Royal Commission was timely and necessary, with Schroder indicating that the general public “needed it”.
“It reminds the executives and the boards and owners that it’s not their money,” he said.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
