Call to keep consumer groups out of financial services law-making
Consumer groups should be explicitly excluded from a suggested Rules Advisory Committee which would help shape financial services legislation, according to the Stockbrokers and Investment Advisers Association (SIAA).
The SIAA has told the Australian Law Reform Commission that while there is room for legal experts and industry groups to participate on such an Advisory Committee, it would have significant concerns about the inclusion of consumer groups.
In doing so, the SIAA pointed to the adverse impacts of consumer group influence in the past.
“We note the proposal is that the Rules Advisory Committee could comprise representatives of industry groups, consumer groups and legal experts such as practitioners and academics,” the SIAA submission said. “While we understand the importance of legal experts and industry groups being represented on the Rules Advisory Committee due to their technical and subject matter knowledge and expertise, we have significant concerns about the inclusion of consumer groups on such a body.”
“Consumer groups have had significant influence over the policies which have shaped the financial advice profession over the last two decades. While it may be appropriate for the consumer voice to be considered at the policy level (and consumer groups have had significant influence over the policies which have shaped the financial advice profession over the last two decades,” it said.
“One could argue to the detriment of both those providing and seeking financial advice), there is no benefit in including consumer groups on a body that is dealing with technical legal and drafting issues. We would recommend that consumer groups not be included on the Rules Advisory Committee for this reason.”
The SIAA said that it strongly supported the establishment of an independent Rules Advisory Committee because it would help avoid poor legislative outcomes.
“It is important that the proposed Rules Advisory Committee represents the entire financial services industry and does not apply the ‘one-size-fits-all approach’ that has created undesirable and unintended consequences for the stockbroking and investment advice sector,” the SIAA said.
“We have previously pointed out in our discussions with the Commission’s review team and in our submission on Interim Report A that one of the most egregious examples of a ‘one-size-fits-all’ approach to financial advice impacting the stockbroking and investment advice industry was the approach by the Financial Adviser Standards and Ethics Authority (FASEA) to the education standards and Code of Ethics (which were administered by FASEA until 1 January 2022).”
“FASEA’s lack of understanding about how stockbroking and investment advice differs from financial planning provided significant challenges to the stockbroking and investment advice profession and continues to do so while ever the Legislative Instruments developed by FASEA remain in place. It is an important example of the damage that can be done to an industry when those imposing standards upon it do not fully understand the way the industry works or take a narrow view that excludes sections of the industry.”
Congratulations SIAA for calling out the damage so called “consumer groups” are doing to consumers. Consumer groups have been hijacked by ideological zealots. They do not represent the interests of most consumers any more. If politicians want to understand the real needs of consumers, they should talk to their constituents. That’s how democracy is supposed to work.
No-one is suggesting the financial services industry hasn’t had problems that needed fixing. No-one is suggesting the interests of consumers shouldn’t be paramount in financial services regulation. But regulation must address the real interests of real consumers. It should not be dictated by the counterproductive ideological zealotry of so called “consumer groups”.
Still waiting for the outrage of fee for no service from intra fund advice fees charged to everyone for personal advice only few use works the same as commissions worked for small business but at least they had face to face service when they wanted to use it.
How is intra fund advice not a fee for no service and still have had not one person argue to say this should not just be fee for service?????
It’s not individualised so noone will complain about their “free” and bias “advice”
The simple reason is ISA Funds have more money $$$ and use their $$$ to control the narrative very well. Forget about Commissions and Advice being hell on earth.
ISA just dress Hidden Commissions For No Service differently and lie about vertical sales advice.
Hypocritical, so what ISA say we do what ever we want and Real Advisers get buried whilst ISA raid the $$$$$:-)
ISA be well worth a look at from federal Integrity Commission.
I was generally astounded government allowed them a voice in the conversation. Choice, for example, have a position on commissions which is completely redundant uninformed and baseless. They don’t sway of help votes and should stick to dishwasher tablets, where their comparisons are more conflicted than any financial advice fee.
At least the ones that rate Vacuum cleaners and Planners that can’t get clients from their own sources.
Consumer groups have been very successful in protecting consumers from Advice, 90% of consumers now can’t afford Real Advice due to consumer groups mass scare campaigns and mass BS over regulation.
Consumer groups must be so proud that 9 out of 10 Aussies are forced to get advice from the pub and or finfluencers.
Great Job consumer groups, who still debit your subscription every month with No Annual Consent.