The financial services industry should be given time to settle into its current regulatory environment before further reforms are made, according to AMP’s CEO, Craig Meller.
Delivering his first major public address as AMP CEO at a Committee for Economic Development of Australia (CEDA) event this week, Mr Meller said the industry was stuck in a “seemingly endless round of discussions and review”.
“Sadly, those discussions seem to be missing what’s important: how we deliver the best outcomes for Australians,” he told CEDA guests.
Mr Meller argued that the existing reforms still needed time to be implemented and for their effectiveness to be assessed.
He estimated that the regulatory reviews over the past three years had cost AMP hundreds of millions of dollars.
“And that is a cost ultimately borne by the consumer,” he said.
“Yet despite this, it seems there’s a strong desire in some quarters to re-regulate – even before the effectiveness of the last round of re-regulation can be assessed.”
…it seems there’s a strong desire in some quarters to re-regulate
He said while AMP backed improved advice standards and a push towards professionalism, the company did not support the Financial Services Council’s proposal for a new Advice Standards Board.
“We do not believe a regulatory solution through a new, independent statutory body to oversee the financial advice profession is appropriate,” he said.
“At AMP we support higher industry standards – and have indeed led the way on this, we support higher entry-level qualifications, and an ASIC-managed register of financial advisers.
“But like any profession, we need to prove we can regulate ourselves effectively. And I believe we can.”
Mr Meller also said AMP remained committed to a vertically integrated model.
“Too many usually self-interested parties like to dumb down the definition of financial advice to just product selection,” Mr Meller said.
“This is usually a ruse to justify a particular entrenched position – and is a million miles from where the true value of advice lies.”
Mr Meller said that high quality advice, in fact, started with determining a client’s life goals, and progressed through an assessment of the financial viability of achieving those goals, and the clients’ attitudes towards risk.
“Many of our advisers tell us, this can quickly become a process of marriage guidance as couples assess the prospect of life together after work…
“Indeed, in an increasingly commoditised product world, product selection is the least important component of high quality financial advice,” he said.
