Regulatory objectivity vital
Editorial Comment
Much as a judge or magistrate has a duty to stay impartial when hearing matters which come before their courts, so too does a Commonwealth regulator have a duty to remain objective.
Thus, the sweeping and emotive language used about financial planners by the chairman of the Australian Securities and Investments Commission (ASIC), Greg Medcraft, in answering questions at the National Press Club last week was inappropriate and arguably raises questions about the regulator's ability to be seen as fair and objective.
Medcraft's seemingly emotive response to questions asked about financial planners is explicable in the context of a year during which much attention was focused on the enforceable undertakings imposed on Commonwealth Financial Planning and Macquarie, but seemed to ignore the manner in which those events were leveraged by the political forces who mounted the campaign against the Government's Future of Financial Advice (FOFA) changes.
Further, intentionally or not, his comments served to tarnish the reputations of many highly ethical and hard-working financial planners while diminishing the achievements of the Financial Planning Association (FPA) and Association of Financial Advisers (AFA) in seeking to lift standards and rid the sector of bad apples.
Mr Medcraft is not a career public servant. If he were, he would likely have stuck to a carefully-prepared script and tempered any comments capable of giving rise to perceptions of bias.
The ASIC chairman is entitled to his personal views about the financial planning industry, but his comments at the National Press Club would be seen by many as having not only unfairly tarnished an entire profession but as having diminished his own office.
- Mike Taylor
Recommended for you
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
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.
