Monday, 30 November 2020
Financial Services Industry: Red Tape
Warren Buffett, also known as the 'Oracle of Omaha', the CEO of Berkshire Hathaway, is considered to be one of the world's most successful investors, with over 70 years of industry experience. However, if he were to come to Australia, as at 12.01 am on 1 January 2021, he would be banned from giving any investment advice unless he first passed the government's qualification exam. Further, he would also be banned, as at the end of 2025, unless at 90 years of age he'd gone back to university and completed eight units of study and passed those exams. Otherwise, he would be forced into retirement.
Such legislation, such red tape, is an absolute nonsense. Yes, we want to try and do more to clean up our financial industry, and we founded the royal commission. But to impose retrospective study requirements on people with 20, 25, 30 and 35 years of industry experience and have that count for nothing—to force someone in their 60s to go back to university to do eight units of study, otherwise, 'Sorry, you're out of the industry'—such legislation is a nonsense. I'm sure people on both sides of the House understand this. I'm sure we all have highly qualified, highly reputable people in the financial industry saying to us, 'Unless this legislation is changed, I will be forced out of the industry.'
There are a few simple and quick changes that we could make to avoid this. Firstly, we need to exempt anyone with 25 years of industry experience without any black marks against their name from having to do the exam. Secondly, all of the 500 exam questions, of which 70 are rotated for each exam, should be published on a website with what are deemed to be the correct answers. Let's have some transparency in this so that people know what the questions are, can study all 500 of them and can look to see what the answers are. Finally, we need to make sure that we recognise industry experience. So my suggestion is that we start at 12 years of industry experience and, after 12 years, for every additional three years you get one exemption of the units of study you must do. Therefore, we are not going to say to someone with 25 years of industry experience who is in their late 50s or 60s, 'We are going to force you back to university if you want to continue your career.'
This is red tape gone mad. We need to fix this.