What is regulation's purpose?
The Act is to be reviewed next year but adviser Murray Weatherston said the industry deserved more clarity about what its objective was.
“Before you decide on regulation you need to decide what the problem is, then what are the possible solutions to that problem. Only if Government intervention is the way to do it do you go for Government intervention… what actually is the problem that we’re trying to fix here?”
He said, given the paucity of complaints that went to external disputes resolution schemes about investment advice, and the few that had gone to the FADC, there did not seem to be a large problem that needed to be tackled.
Smaller changes could have had better consequences for consumers, he said, such as requiring independent custodians to avoid future David Ross-style situations.
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