RC will force regulation, but less is more
The consensus across industry experts is that a post-Royal Commission world will involve complete and full disclosure, but more paperwork and onus on the institutions won’t work, a panel has told Money Management and Super Review’s Future of Wealth Management conference.
The experts said while the Royal Commission was much more consumer-orientated than it was originally thought to be, whether consumers were aware of the compliance burdens placed on institutions was “another story”.
“It’s more paperwork into the system … and none of it protects the clients,” added Steve Davis, chief commercial officer, Infocus.
“Somehow, regulators need to understand that less is more, but unfortunately that won’t come out of the Royal Commission.”
When asked if industry funds got off lightly, AustralianSuper group executive, Paul Schroder, said people had forgotten the human impact on those involved.
“The only message I’d like to convey is don’t forget the human impact on the people in this broader financial services industry of this Royal Commission,” he said. “If you’re involved directly its exhausting, and if you work in an institution that’s involved, it challenges and upsets your confidence.”
But other panellists thought they had, with Grahame Evans, managing director, GPS Wealth, telling the conference that industry funds didn’t receive the intensity of interrogation as the other institutions.
David Murray, CEO of Sterling Private Wealth, said industry funds were fortunate because of where the Royal Commission directed its attention in its early stages.
“I think the order has been quite deliberate,” he said.
The experts were hesitant to place onus on the regulators though, with Evans telling the conference that regulators have had to “battle hard” and negotiate against “some really high power”.
Annick Donat, CEO of Madison Financial Group, said it was unfair to judge the regulators against the Royal Commission.
But, all the experts agreed the Royal Commission was timely and necessary, with Schroder indicating that the general public “needed it”.
“It reminds the executives and the boards and owners that it’s not their money,” he said.
AUTHOR
Anastasia Santoreneos
Recommended for you
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
