Reforms subordinate to regulatory guides

Greater scrutiny of ASIC’s regulatory guidelines in recent years might have removed the need for industry reforms and various inquiries into financial services, MyPlanner Australia said yesterday.

“Though we’ve had the Future of Financial Advice reforms and papers such as the Murray inquiry and the Trowbridge report, I think they’re ancillary to actually looking at our regulatory guides,” MyPlanner Australia managing director Philippa Sheehan told financialobserver.

“Fundamentally for me, some of the things that have been happening do tidy up our industry, but the core legislation is not right,” Sheehan said.

She suggested the wording of ASIC’s regulatory guidelines should perhaps be revised since they ran the risk of being misconstrued.

“If you have a look at our regulatory guides and even the licences that are issued by ASIC, they refer to advising and dealing in financial product and then it will list superannuation, margin lending, deposit-taking products, et cetera,” she said.

“The fact is, probably 80 to 90 per cent of what a good financial planner does isn’t actually advising and dealing in financial product. They talk about structure and strategy of a client’s situation before they ever talk products.

“Therefore the risk is if 80 to 90 per cent of advice financial planners [collectively] give is around strategy and structure and not product, then you don’t particularly need to be licensed for that, so that allows property spruikers, corporate advisers and others to advise around that.”

A lot of grey areas remained around those aspects, she said.

“Commissions is certainly one of those [grey areas] linked to MyPlanner Australia products, though I think there are some high priorities that I’d like to see addressed this time [as part of the Trowbridge report],” she said.

The financial planning industry had not been the best at organising itself, she said.

“We see some licensees move towards education reforms, while some don’t. We see some insurance companies moving away from upfront commissions and some not,” she said.

“We are very much guided by our associations, either the Association of Financial Advisers or the FPA, as far as their positions on things like that are concerned and ultimately it is around clients’ best interests.

“I’m very comfortable around the fact that our advisers do provide advice for clients in their best interest, and the day I see that change because of an upfront commission, well then I might change that view.” – See more at:

Recent Posts

Leave a Comment