Has the Royal Commission passed its use-by date?
The Federal Government has sent a clear signal that it thinks the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry is now history and that consequent Parliamentary Committee recommendations do not warrant legislative responses.
And that signal includes is recommendations from Labor Senators around improving the quality of financial advice.
The signal is contained in the publication of Government responses to recommendations contained in the reports of Parliamentary Committees, including those of the Senate Economics Committee with respect to 2020 legislation recommending changes to advice delivered around self-managed superannuation funds (SMSFs).
That legislation, The Treasury Laws Amendment (Self Managed Superannuation Funds) Bill was aimed at increasing the maximum number of allowable members in a SMSF or small APRA fund from four to six and finally passed into law in June, 2021.
However, the legislation was referred to the Senate Economics Legislation Committee which resulted in Labor Senators using a dissenting report to recommend “the government should proceed with Commissioner Hayne’s recommendation that there be a review of measures that have been implemented by the government, regulators and financial services entities to improve the quality of advice”.
The Government’s response, finally published by Treasury in May this year states: “The Government notes this recommendation. However, given the passage of time since this report was tabled, a substantive Government is no longer appropriate”.
The Government responded in exactly the same terms to another Labor Senators;’ recommendation that “the government should consider adopting the reforms recommended by the Productivity Commission to create stronger safeguards on SMSF advice should be fully implemented. More broadly, systemic reform is needed to ensure people have access to independent advice”.
The dissenting report also recommended the “government provide further advice on the financial and compliance costs of implementing the reform including for individual members, SMSF advisers, and regulators.
Other than getting the insto/product pushers out of advice (this was very valuable) it served little practical purpose and only drove up costs in the short term.
With “qualified advisers” being employed by mostly industry funds I would expect we’ll be back to square one. Banks will weasel back in where they can make a buck too.
A lot of ruined careers, stress, anxiety and cost for no long term benefit will be the legacy. Much like LIF unfortunately.
If Hayne had had professional and experienced planners on his “prosecution committee” and he listened to them as well as the zealots that had no practical experience, it could have been a good series events for the long term. Hayne had little practical understanding on the matters he was prognosticating on.
My present expectation is the ONLY long term outcome will be shortened careers and many many LESS Australians being able to access advice.
Not something at all to be proud of Mr Hayne.