‘Nobody’s looking at what the consequences are’: What regulation is getting wrong

On a new episode of the ifa Show, Synchron’s general manager – compliance, Phil Osborne, said he believes that while both the regulators and stakeholders in the sector have “good intentions”, changes are not being properly thought out.

“Everybody's got very good intentions… but nobody's looking at what the consequences are and whether or not things can be done a little bit better than what they are,” Mr Osborne explained.

He reiterated a point he made earlier this month surrounding a proposal to “target a principles-based regulation framework”, in which he said it must be “considered carefully and not be a knee-jerk reaction for popular support”.

“While Commissioner [Kenneth] Hayne wasn't looking for popular support, he was doing a good job, a lot of politicians jumped on it and said, ‘Right, fantastic. We are going to run with this and we are going to do this.’

“And all of a sudden, we've got that popular support thing rather than sitting back and saying, ‘Okay, where are we going with this?’”

Mr Osborne suggested the FASEA exam and current education standards – which many are now arguing could result in a mass exodus of advisers by 2026 - as an example of regulation pushed through without proper strategy.

Last month, he backed calls for an exemption for the requirement to attain a relevant degree for advisers with 10 years’ experience saying that the industry must learn from FASEA and “not mistreat” longer-serving advisers.

“Let's be smart about it. I think that there's been a lot of knee-jerk reaction,” Mr Osborne said.

“A lot of people that are making very well-intentioned and great ideas come forward, but they just haven't stopped to consider what it actually will take for the practitioner to be able to implement that effectively and still actually meet their ongoing obligations to service their clients.”

Earlier this week, wealth manager WT Financial Group announced the acquisition of Synchon; a move that will see it become the largest non-institutionally owned financial adviser network in the country. 

Listen to the full podcast with Mr Osborne here.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.