Funds unimpressed by Rudd offer
The funds management industry is less than impressed with Prime Minister Kevin Rudd’s proposals to provide funding to the Australian Prudential Regulation Authority (APRA) to allow mortgage funds to apply for approved deposit-taking institution (ADI) status.
According to senior funds management executives, the process outlined by the Prime Minister does not represent an optimal approach on the part of the Government in circumstances where it could take funds management companies up to six months to gain ADI status.
“There are other ways and that is something we will be continuing to discuss with the Government,” one senior executive told Money Management.
The Prime Minister last night used an address to reveal that the Government would be providing a further $83 million in funding to APRA to enable it to speed up applications from funds management companies seeking ADI status.
However, he stressed that, in doing so, those funds management companies would need to pass all the regulatory and prudential hurdles that went with being an ADI.
The Prime Minister’s announcement had been flagged to both the political media and some senior funds management industry representatives late yesterday afternoon, but the consensus within the industry this morning was that while the Government was clearly trying to help, the ADI proposal did not represent an adequate answer.
In the meantime, ratings houses have continued to place those mortgage funds that have frozen redemptions ‘on hold’.
AUTHOR
Mike Taylor
Recommended for you
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
New Zealand’s financial regulator is following the footsteps of its Tasman neighbours and proposing to conduct a review on improving the accessibility of financial advice and advice business models.
Lower fees and trustworthiness are the top factors enticing unadvised Australians to seek a financial adviser, according to Fidelity International, common across all generations.
AFCA has confirmed United Global Capital’s membership of the body will not be extended to accept further complaints, avoiding a repeat of the Dixon Advisory scenario.
