Did the Australian Royal Commission change everything? Or had everything changed already?
Long-run changes have a habit of creeping up on us. Gradually, society changes, but we pin the ‘big change’ on one emblematic moment.
Monday, July 9th 2018, 9:34AM
by Russell Hutchinson
For the decline of the Soviet Union, maybe it was the fall of the Berlin wall.
For mobile computing, maybe it was the launch of the original i-phone.
For the internet, maybe it was with the spread of Netscape.
It might be said that nothing had changed before the Australian Royal Commission, but I’d argue that’s not true.
In Australia there was the Freedom of Financial Advice Act (FOFA), and prior to that a long history of changes in how consumers relationships with financial institutions and advisers have changed.
As the FMA points out, it released its guide to conduct well before the Australian Royal Commission. As insurers point out, they have always been concerned about what customers and the market think of them.
We all agree that confidence in the market place is important.
We often disagree over exactly what that means and how to achieve it.
Put all this in wider context with another long-run trend: consumerism.
The consumerist movement, in which consumer protection is advanced, may be said to have been led in its most recent form by Ralph Nader and Esther Petersen.
Consumers, helped by activists, have become better educated, and fussier about what they buy and how they are served by the market.
In response, the market has offered more choice and variety, and improved services. Government has helped with greater consumer protection in laws and regulators.
We are going through a wave of change, sure, but it is all really about the long-run trend towards greater protection for the consumer.
As a consumer, I am delighted.
You and I might also not be quite so delighted, at times, at the amount of work, or sometimes painful changes in the industry in the pursuit of an optimal market for consumers.
The change to licensing is one such change. While it might be tempting to blame the FMA, or government, or even the Australian Royal Commission.
Those are really only symptoms of a consumer-led change.
When you think of it as being consumer-led, it makes it more important, and less personal.
After all, changing for the good of our consumers is surely the best reason to change.
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