Hedging your bets

There will be many in the Australian financial planning industry who, looking at the Federal Government’s changes to their industry, believe that their interests would be best served by the defeat of the Australian Labor Party at the forthcoming election.

In the opening weeks of the campaign, the Money Management blog has been the recipient of many entries imploring planners to encourage their clients to vote for the Coalition. Many others have urged the Financial Planning Association (FPA) to up the tempo of its lobbying to both the major parties.

Given the degree of change being confronted by planners and the widely-held perception that the Labor Government’s agenda has been influenced by the trade union movement and the industry superannuation funds, the level of antipathy towards the election of a Gillard Government is understandable.

However, history has shown that it is a naïve, not to say foolhardy industry or industry organisation that seeks to back particular winners during an election campaign. The history of Australian politics is strewn with the wreckage of organisations that have made such mistakes.

If justifiably angry planners want any proof of the folly of such tactics, they need only look to the 1991 federal election when, with the Keating Government seeming all but unelectable, the Housing Industry Association openly and strongly backed the Coalition being led by John Hewson. When Labor was returned to the Treasury benches, it was no secret that the HIA found it harder than most to both gain and maintain the ear of the Government.

It is on that basis that the FPA, the Association of Financial Advisers (AFA) and the newly-named Financial Services Council (FSC) will be remaining non-partisan through the election campaign, notwithstanding the fact that two of the three organisations employ the services of former Liberal Party politicians — John Brogden as chief executive of the FSC and Kerry Chikarovski as an adviser to the AFA.

Brogden and Chikarovski well understand the rules as they pertain to elections and the dangers that exist in being seen to take sides.

However, maintaining a non-partisan stance is not the same thing as remaining silent. The major organisations representing financial planners can and should be restating their policy positions throughout the campaign period.

Irrespective of which of the parties wins on 21 August, 2010, many things will change for the financial services industry, not least the make-up of the Cabinet and carriage of the portfolio. That is why it is important to ensure that the appropriate doors remain open.