By Philip Macalister
Fund managers can breathe a sigh of relief now that the Securities Commission has decided not to review their practices, however financial planners aren’t so lucky.
The commission has officially canned a review of fund management practices it had been working on for the past two years.
Chief executive John Farrell says the review was abandoned because the information it gathered from managers two years ago was now out of date.
Managers were becoming concerned about the review because the commission kept pushing back its publication date, while at the time labelling the project as important.
There was a feeling amongst some managers that the commission’s report was going to reveal unsavoury practices, or that it would be used as a tool to introduce a regulatory regime.
Farrell says the commission has no plans to promote regulation. Since the report was canned, reviewing fund managers has totally dropped off the commission’s jobsheet.
However, the commission has financial planners high on its work list.
It put out a discussion document on how to improve practices among financial planners last year, and after reviewing submissions is in a position to make recommendations to the Minister of Commerce, Paul Swain, within the next couple of weeks.
Details of the proposals haven’t been released, however they are likely to include toughening up rules over disclosure of information to clients, self-regulation and improved education standards in the industry.
Investment Savings and Insurance Association chief executive Vance Arkinstall says the issue of adviser regulation will be one of the most difficult facing the industry this year.
His personal view is that the industry moves to self-regulate quickly, or regulation will be forced upon it.
“The answer is clear, either the wider financial services industry moves of its own accord to strengthen the self-regulation environment and closes the gaps between the current position and the requirements of a regulated environment such as exists in Australia, or we will quickly find ourselves defending a weak position against tough regulation,” he says.
