Business News

Co-regulators can drive higher professional standards

A co-regulatory model for SMSFs could result in the sector benefitting from the best of both types of regulation, prudential and compliance, according to a specialist industry adviser.

“Co-regulation recognises the legitimate role of the regulators, both a market behaviour regulator and a prudential regulator, but also recognises the valid roles entities such as professional organisations and licensees have to play,” Chase Advisory managing director Andrew Gale said.

“The big risk with a mandated model from a super regulator laying down the standards is it doesn’t actually drive higher standards.

“The risk is it sets a lowest common denominator and people fulfil what the super regulator requirement is and unless you encourage other elements of professionalism and accreditation, they stop there.”

Co-regulatory models had worked for the medical, legal and actuarial professions where professional and government bodies worked in tandem to achieve professionalism and promote higher education, he said.

He also referenced the recent Parliamentary Joint Committee (PJC) on Corporations and Financial Services, which recommended professionals who operated in the financial services industry be members of a professional association.

“The big advantage of the PJC recommendations is that people would have to be a member of a professional body and that’s actually a very powerful thing,” Gale said.

The view was expressed at the recent SMSF Association National Conference in Melbourne where the concept of a ‘superlator’, a single governing body to oversee the superannuation industry, was explored.

At the same time Deloitte Actuaries and Consultants partner Russell Mason put up a counter argument in support of a super regulator.

He said the industry currently already spent a lot of time and money working out what to report, and to whom, and a single governing body would simplify and streamline that process for investors, he added.

“The amount of time this industry spends with reporting to regulators, working out who to report to, what to report – it’s time and money,” he said.

“A single regulator will look after everything connected to super.”

Mason reasoned a framework consisting of a single regulator could also oversee the real estate sector if people in that industry gave advice on superannuation.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital