Sent: 07-02-2012 12:15:03
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Financial Advice Reforms
There have been lots of claims that the Government's proposed financial advice reforms will cause many thousands of job losses.
It's without question that those making these claims are speaking from their expectations of what these changes would do to their own business and the businesses of their industry colleagues.
I wonder if these challenges to their businesses are reflected in their share prices and if not, why not? I don't follow too many company's on the sharemarket closely but I'm not aware of any formally advising the market about the likelihood for significantly worse trading conditions.
I guess these job losses also have to be weighed against the announcements from the accounting profession that they expect people to join the industry. Is the removal of the accountant's licensing exemption unnecessary if the accountants and ethics standards board formally adopts the proposed remuneration of financial advice?
This is a major question that I don't think anyone seems to be discussing.
Whilst on the subject of the financial advice reforms, it's interesting to note the Westpac submission to the Parliamentary Joint Committee on Corporations and Financial Services (PJCCFS). Westpac managed to mention many complex and contradictory issues in the legislation which ideally will be adjusted, amended or removed. It will be interesting to see if the Government can make adjustments for this granular analysis of proposed legislation. Typically governments work in big pictures, generalities and sledge hammers.
One of the biggest problems the industry has is one of perception especially in relation to conflicts of interest and self-interest.
The fact that many industry people fight to retain the status-quo doesn't help this perception aspect. The preliminary findings of ASIC's recent shadow shopping project released to the PJCCFS also don't help perceptions.
When one combines these aspects, it's logical for some people to conclude that the financial advice industry contains people whose behaviour isn't easily regulated or managed.
Why should the industry be "managed" ever more closely because of the poor advice and practices of a few unethical dills?
I can only answer this using an analogy. Doping in professional cycling has caused that sport considerable harm. It may be that every professional cyclist has never taken illegal performance enhancing drugs or supplements. This doesn't mean that some people still don't look on it with a fair amount of scepticism and their suspicions are heightened when a competitor is scrubbed out because their sample has returned negative.
The reality is that it'll take a long time of squeaky clean behaviour for these perceptions to change.
Just before Christmas I published a revised version of my SMSF book. You can see all the changes that have been made between Version 5.1 and 6.0 (the latest edition).
You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
For details of the changes made from version 5 to version 6 visit: http://www.atcbiz.com.au/r.php?r=d5xcpch
As you'll see from the list there have been many changes.
Two purchase options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.