It is now clear that the Federal Government will hasten slowly towards its ultimate reforms to the financial planning industry.
It is also clear that throughout that slow process, the industry superannuation funds will continue to wage their campaign against commissions-based remuneration and in favour of their own concept of fiduciary duty.
The Parliamentary Joint Committee on Corporations and Financial Services (the Ripoll Inquiry) has delivered precisely what could be expected from a parliamentary inquiry — a set of recommendations for the Government to consider but no silver bullets. This was always going to be the case.
It is in the nature of such inquiries that they are as much about process as outcomes. The process resulted in some serious flaws being identified and discussed, not least the problems that gave rise to the collapses of Storm Financial and Opes Prime. However, the outcome will ultimately depend on the Government’s broader agenda.
The Ripoll recommendations carried with them the support of all the major parties — Government and Coalition. It was highly unlikely that a set of more radical recommendations could have gained bipartisan support. Indeed, had the Government members of the committee sought to reflect the agenda of the industry funds and some media commentators, there would have almost certainly been a dissenting report issued by the Opposition members and senators.
It was therefore entirely predictable that a stock standard report from a Parliamentary Committee would never meet the requirements of the industry commentators and urgers.
Those same commentators and urgers will therefore be pleased to know that the forum for their opinions remains open, with the Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, having already redirected at least some of the focus from the Ripoll recommendations by suggesting that, ultimately, they will be considered by the Government in the same context as the Cooper Review of superannuation.
Then too, whatever the Cooper Review decides will ultimately be coloured by the findings of the Henry Review of Taxation.
Given the moderate tenor of the Ripoll recommendations, it ought go without saying that the financial planning industry was broadly pleased with the outcome. The pragmatists know, however, that Ripoll represented just one step in a much longer journey.
