Those listening attentively at Money Management/Association of Financial Advisers breakfast in Sydney would have heard Industry Super Network chief executive, David Whiteley, make an appeal to the financial advisers in the room to give the Government’s Future of Financial Advice (FOFA) changes a chance to work before rushing to have them amended.
The obvious sub-text to Whiteley’s request was the likelihood that the Coalition Liberal/National parties would win the forthcoming Federal Election and, consistent with undertakings given to the financial planning industry, six key amendments would be introduced early in the new Government’s first term.
Whiteley argued that the FOFA changes would have been given little time to operate in practice, and it would therefore be inappropriate to amend or repeal them without having determined precisely what impact they were really having.
As reasonable as the ISN chief executive’s argument might have seemed, there were many at last week’s breakfast who noted that the industry funds had not seemed nearly so reasonable 18 months earlier when the Treasury was developing the FOFA bills and the ISN was heavily leveraging the fact that it had very senior access to the Government.
Few people would quibble with the fact that the ISN strongly asserted its political influence between 2010 and 2013, or that the elements of the FOFA legislation such as opt-in, fee disclosure statements and the outlawing of commissions on risk insurance inside super were owed to the influence of Whiteley and other senior industry super fund spokesmen.
Whiteley also knows that the things the Coalition parties have said they will change about the FOFA legislation were flagged after hearing industry submissions and after the Parliamentary debates and committee reviews of the bills.
In other words, the promised amendments are not simply a political get-square.
Throughout the, at times, very animated debate around the FOFA legislation, there were numerous voices, including that of Money Management, which sought to caution the Industry Super Network about the “political pendulum” and the dangers of pressing political advantage and influence too far.
Mr Whiteley may seek to justify the approach his organisation adopted in any way he likes, but that cannot serve to erase the fact that in a high stakes political and policy game, his organisation over-played its hand.
Addressing the same Money Management/AFA breakfast, the Liberal member for Bradfield, Paul Fletcher, reflected that a great deal of the bipartisan report which had been generated from the Ripoll Inquiry had been “lost in translation” where the FOFA outcome was concerned.
He is right. While many of the changes inherent in the FOFA legislation are both warranted and long overdue, other elements owe more to the securing of ideological/commercial objectives than to protecting the interests of investors.
Mr Whiteley must accept that the pendulum, having swung one way, must now swing the other.
