Financial services downgraded

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Prime Minister Kevin Rudd has announced his new-look cabinet and the biggest shift in the eyes of the financial services sector will be the removal of Bill Shorten from the financial services and superannuation portfolio.

Shorten has been replaced by Assistant Treasurer David Bradbury, and now holds the portfolio of education and workplace relations. Penny Wong will hold onto her spot as Minister for Finance and Deregulation, and will lead the Government in the Senate.

Shorten said he was “proud” of the reforms they had made during his tenure. “We have built upon on the great legacy of Hawke and Keating, which improve the transparency and fairness of our financial services sector, while making our superannuation system more sustainable for the future.”

He said that they had “bought[sic] the financial planning industry into the 21st century by removing conflicted remuneration structures and challenging the industry to become more professional, a challenge which I think the industry has and will continue to rise to."

“I’d also like to extend my thanks to the financial services sector for working co-operatively and diligently with the Government to deliver reforms in the best interests of all Australians.

“I am certain that Treasurer Chris Bowen and Assistant Treasurer David Bradbury will continue Labor’s legacy of working towards providing all Australians with a dignified retirement.”

Shadow Minister for Financial Services and Superannuation, Mathias Cormann said the Government had “significantly downgraded the importance of financial services and superannuation by eliminating a minister with dedicated responsibility.”

“The Treasurer's responsibilities have always included financial services and superannuation. However, in the past a dedicated minister had specific responsibilities for this important area,” said Cormann.

“Instead, the Rudd Labor government has decided to downgrade financial services and superannuation to a mere 'minister assisting' position.”

Bradbury holds an Arts Degree and an Honours Degree in Law. He has also undertaken postgraduate studies in taxation law. Prior to his election to Parliament, Bradbury was a senior associate practising in taxation law with the corporate law firm Blake Dawson.

  • Pat on 3/07/2013 11:13:42 AM

    James, when you refer to vested interests, do you mean the vested interests of advisers who have been around for a long time, who prefer to work in conflicted models of commissions/percentage fees, platform rebates, etc. and who think it is their god given right to give advice that is fundamentally conflicted?

  • SB on 3/07/2013 10:49:04 AM

    James you need a bex and a good lie down. Being so rude to a professional and non personal post only highlights that even old, experienced advises have a level of immaturity. Cases like Storm and Nguyen highlight that successful and experienced does not equate to being ethical and if you can't see this then you are only confirming that you have your head in the sand. "Young and educated" advisers may not have all the answers but at least by looking for some they might improve the public perception of advisers and those of us who are doing the right thing will not have to feel the need to defend ourselves.

  • Phil Thompson on 3/07/2013 10:34:47 AM

    James if your read my original comment i was disagreeing with the comment Alistair made that 'It is not the advisers at fault'. Of course the majority of advisers are not at fault but to say that no adviser is at fault is totally and utterly incorrect. I have never made a comment about your business nor your advise but to ignore that fact that there have been some massive indiscretions in the past through advisers not managing conflicts is very naive and in my (inexperienced) opinion only gives fuel to the vested interest agenda.

  • James Smith on 3/07/2013 9:52:51 AM

    Phil I am sick to death of young advisers like yourself that talk down our profession and assume that you have all the answers. You know nothing about my business so have no basis to assume my business (or any other
    ) have shortfalls that need to be addressed. The experienced,successful advice businesses should lead this debate. You would benefit from listening to the wisdom of advisers who have successfully served their clients over decades and are in a position to see through the vested interests pushing the current agendas and the cost and limited value in the FOFA proposals.

  • Phil on 3/07/2013 9:26:09 AM

    James i am not sure as to why i feel compelled to explain myself given my comments were the we as an industry of advisers need to own up to our mistakes.

    However i am indeed a young self employed financial adviser of which the FoFA regulations will hit me harder then most so please do not make assumptions on my personal position purely based on one comment.

  • James on 2/07/2013 8:18:21 PM

    Phil you are obviously not a financial adviser you sound like a well educated uni grad that's job is to reflect the in defendable Phil become self employed and create something rather than sitting in the coffee shop spinning sh....

  • Phil on 2/07/2013 11:43:46 AM

    Alistair - I do agree that the industry as a whole needs a change and not just the advisers.

    However your comments stating that the 'advisers are not at fault' only increases the idea that the industry has and will continue to dig its head in the sand. We as advisers need to shed light on the inconsistencies of the current legislation (as you have mentioned) just as much as we need to own up to the shortfalls that we as advisers have made in the past.

    Comparing government taxes to adviser service fees is just plain illogical.

  • Alistair on 2/07/2013 11:03:27 AM

    They as in Labor speak in terms of their massive ego being built with every claim they make about our industry but the fact is that instead of creating a better industry these fools have merely increased the level of paperwork for all with little benefit to the folk that matter. The consumer. Meanwhile they will make an example of the Storm directors to show how bad the industry was before they arrived on the scene to "clean it up". Corporations law however for directors of companies and trustees of superannuation funds have had no significant change thereby allowing those that run these large funds especially the Industry Funds to continue unchecked and unaccountable to the spirit of Corporations Law. Investors need to beware. Its not the advisers at fault, it is the regulator and their incompetent puppet masters under this pathetic excuse for a government that is the worry. The advisers, they are just the fall guy to take the blame.
    The government talk about our fees and how the reduction in fees will lead to a better outcome for consumers. Well, if this is their claim, surely does not anyone see that a 15% fee ( i mean a contribution tax ) and a 15% fee ( sorry an earnings tax ) on super would have a better outcome if these were reduced or removed.
    Oh yes - this is a tax when ours as a planner is a fee....oh yes the logic somehow defies me.
    Last night 1/7/13, the Four Corners program spoke of the working poor and how in increasing numbers, Australians are living from pay to pay.....this is the legacy of Labor. How proud they must be.
    The only thing Labor needs is to have their logo as the hammer and sickle instead of the Australian flag.
    Bring on an election.

  • James Smith on 3/07/2013 12:29:13 PM

    There are bad apples in all walks of life. No amount of legislation or professional standards will prevent the impact of bad apples because they will break the rules.The key point I am making is that FOFA should be challenged with a new government around the corner who are likely to be far more sympathetic to remove meaningless red tape and acknowledge the voice of experience. Assertions regarding conflicted remuneration should be assessed against a broad range of factors that determine the best interests of clients and acknowledge the costs of servicing them. Orphan clients in industry or retail super funds may be necessary or preferred by some but is not the panacea for a number of reasons. Google the Dalbar studies findings on investor behaviour in periods of volatility and the consequential wealth destruction for investors not in an advice relationship.

  • Phil on 3/07/2013 11:50:15 AM

    James i am not a big fan of going tit for tat with each other on this forum. However, as i previously stated i am a self employed financial adviser of which i day in day out look after my clients if which i will be greatly affected by the FoFA reforms.

    I have never once made a pro labor statement and in fact have done just the opposite in stating that i agree that there are vested interest and inconsistencies within the current FoFA reforms.

    I do not and have not claimed to have any answers to the issues facing our industry but i strongly believe that all advisers whether old or young, experienced or new should be apart of the debate.

  • Pat on 3/07/2013 11:47:33 AM

    James Smith: the market has done a very poor job in the past of sorting out the good businesses from the bad:

    1. Storm
    2. Nguyen from CBA
    3. Adviser firms flogging Astarra/Trio

    to name but a very small few for whom the market did little to nothing to protect clients.

  • James Smith on 3/07/2013 11:42:55 AM

    Professionalism is determined by how you act and how you service clients. Legislation will not make us more professional or weed out bad apples nor will chest beating that we need to lift our game. The market will sort out the good advice businesses from the bad. Clients will vote with their feet. Productivity and efficiency and engaging with clients at their level should be our priority not wasting time cutting and pasting selective fee items on a sheet of paper to show how professional we are ??

  • James on 3/07/2013 11:20:03 AM

    Phil when you say you are a financial Adviser are we talking about the type that ave clients and help people manage their money or do you call yourself a financial adviser but do not have a client base yet is very quick to attack those of us that have been doing such a good job. Are you sure your not a stooge for the labor party ?

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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