Australia's FSR an eye-opener

Monday, February 14th 2005, 1:45PM

If the taskforce on adviser regulation goes anywhere near the Australian model all advisers in New Zealand should be concerned. Very concerned.

Last week I was on the other side of the ditch looking at, amongst other things, how the new regulatory regime in Australia has bedded down in the past year.

The conclusion - poorly.

While quite a few advisers I spoke to said the regime was good, they still had concerns about flawed parts such as the SOA - or statement of advice.

What's most concerning is that even one of the architects admitted that FSR hadn't worked. The only part which had worked was the ability to throw people out of the industry.

Adding to the concern is that even though the Australian Securities and Investment Commission (ASIC) put huge resources into explaining the changes, and the media wrote pages of stories, many advisers just don't understand the changes.

What is really weird about the whole FSR regime is that it is designed to change the behaviour of advisers. (That seems to come from the premise that all advisers are bad and need behaviour modification).

They have to document all sorts of things and keep logbooks of this, that and the other thing they do that could be "wrong".

To me it is like giving my children a list of jobs to do and when they don't do one - like unpack the dishwasher - then they have to record it in some sort of log book. This is going to make them do it next time.

Fat chance that will do any good.

Submissions to the taskforce are due in by Friday. If you haven't done so get writing.

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