[Weekly Wrap] Please minister, engage
One of the outcomes from this year’s election, no matter who won, is that we are likely to see a new Minister of Commerce and that is probably a good thing.
Friday, September 26th 2014, 9:23AM
For the financial services industry that is a good thing as we head into the first full review of the Financial Advisers Act.
The current minister, Craig Foss, has been visibly absent from the sector. My sources tell me his view is that the job is done and he can work on other things.
There couldn’t be anything further from the truth.
The reality is the FAA is broken. It doesn’t work with all the different designations and entities involved.
There may have been an improvement in public confidence, but some days, especially when van Eyk situations explode, you have to ask the question – can the sector ever be made bullet proof?
The answer is pretty obvious.
The question or the FAA review is do we chuck out what we currently have and start again or do we try and tweak and fiddle with the current laws to see if they can be made to work more effectively.
The answer isn’t clear. Throwing everything out and starting again, has merit, but would, I suggest, cause a total meltdown in the sector after all the hard work everyone has put in over the years trying to complying with the ever-increasing requirements thrust upon them.
Trying to fix a broken piece of apparatus is also fraught with difficulty. (The word band-aid springs to mind).
What is critical in this review period is that the decision makers are not captured by the big end of town, as they arguably were last time.
If the decision makers believe in independent financial advice, as the FMA does, they have to listen to what the advisers, in the SME part of the sector, are saying.
The debate is likely to be loud as there is little doubt the status of RFAs will come under scrutiny. We have already seen in stories like this one, what will happen.
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