Addressing the recent AIOFP conference in Hobart, John Hewson said the government’s regulatory approach to the advice sector was “counterproductive” but that it was important the industry band together to argue a case for how the growing compliance burden could be eased.
“You’ve got a government attitude to this industry which is counterproductive and ill-informed — they’re not paying attention to the reality of your circumstances,” Mr Hewson said.
“In my experience with government, the best thing to do is have a very clear proposition of what you want and argue the case on the basis of substance, as hard as that is, because if you don’t, they’ll solve it for you. They will define what should be a decent income for a financial planner, if indeed they want financial planning to persist as an industry at all.”
Mr Hewson said the increasing number of politicians with no real-world experience was having an impact on the quality of policy development, and the only way this could be countered was by the industry regularly and simply stating its case to the minister of the day.
“The sort of skill sets you need to win preselection in any of the major parties are not the skills you’re going to need to run a major department, so somebody will do very well at organising votes to get preselected and they end up running a multibillion-dollar department with zero real-life experience,” he said.
“In terms of your industry, you’d easily say, where’s the strategic thinking? There’s been a lot of knee-jerk reaction to certain instances that have been identified and a perception of some politicians that the industry has been out there to rip off unsuspecting investors, yet there is no strategic thinking going forward.
“They take short-term decisions with no particular understanding of this industry and where this industry should go. Having a finite proposal for what you want as an industry and what you want them to do to make that framework work is the only way to beat it, and you’ve got to be prepared to argue that case at all levels of the political process.”
Divide to conquer is a well worn strategy. The financial advice industry with its numerous associations has done this for the Government. While representing the interests of their cohort, all these bodies can and should have a united front to protect their various interests and speak as one for the future of the industry and instill some strategic thinking into Government. Between advisers and their clients there is a significant weight of numbers that could be brought to bear.