The year in review

Judith Fox, CEO, SIAA

We think you will agree that it has been another big year at Stockbrokers and Investment Advisers Association (SIAA) and a year of significant change for our organisation.

A new name
The members of SIAA continue to make an incredible contribution to the financial wellbeing of their clients, to businesses in need of capital and ultimately to the economy, all at a time of ongoing uncertainty. One of SIAA’s aims in the past 12 months and going forward is to educate policy makers, regulators, the media and other stakeholders about the significance of this contribution. Our name change in March from Stockbrokers and Financial Advisers Association to Stockbrokers and Investment Advisers Association was one plank in that education process.

The lack of understanding of the value this profession and industry adds to individual and national wealth is most evident in the fact that there has also been almost no understanding of the difference between stockbroking and investment advice and financial planning over many years.

A key win in the last year therefore has been achieving recognition by all stakeholders in the financial advice ecosystem that the ‘one-size-fits-all’ approach to the regulation of financial advice is not practical, efficient or fit for purpose. This was a vital first step in achieving change, with the next important step being to secure change to the mandated education standards.

We had been in discussion with the then Shadow Minister, Stephen Jones over the past few years and were very pleased when he recognised the problems and committed to change prior to the 2022 federal election. Indeed, the first sign of change was at our 2021 conference when he stood before our members and noted that stockbroking has been in existence since the coffee houses of London and Amsterdam and that the regulatory framework needs to recognise specialisations. That was a profound change from the former government’s view which was that one size fits all.

Once in government, the now Minister introduced consultation on changes to the education standards. Regrettably, we are still waiting for legislative confirmation that 10 years of experience is the equal of a degree, which the Minister now advises will be forthcoming at some point in the first half of next year. Equally regrettably is that we are still waiting for the qualification pathway to be expanded to provide for education appropriate for those working in capital markets.

The current regime imposes a financial planning education model on our profession. We support financial planning education for financial planners, but studying insurance and aged care is not appropriate for those monitoring company balance sheets; undertaking sector analyses; understanding the growth and value opportunities of entities listed on the Australian and global exchanges; and considering micro and macro factors domestically and globally that may influence equity investment decisions. Indeed, the firms in our industry employ financial planners and are fully committed to their undertaking relevant study, but they also employ stockbrokers and investment advisers and understand they need education tailored to the financial advice they provide. Financial planning firms do not employ stockbrokers and of course are not market participants and do not have this broader view of why an expanded qualification pathway is required.

Our media mentions tally this year currently sits at 108. SIAA has been featured across many major national news outlets and industry media publications this year, helping assist the understanding of what it is that stockbrokers and investment advisers do and the value they add.

Policy and advocacy
While much of our work has concentrated on educating all stakeholders as to why the one-size-fits-all approach to financial advice is not efficient or fit for purpose, we have also actively engaged on the CHESS replacement project. The announcement by ASX recently that the CHESS replacement project has been pulled is disappointing, given the expenditure of a great deal of time, effort and money by SIAA members and shows that our engagement needs to continue.

Unfortunately, despite meeting ASIC in conjunction with AFMA and then with heads of firms, we have been unable to persuade ASIC that its expectations as set out in Report 708 will introduce complexity and cost for no benefit. As we continue to point out, if there is a primary market outage, member firms can already reroute to another exchange, but the profound uncertainty is why trading decreases so significantly. These issues are also central to our response to ASX’s consultation papers on market management.

The Quality of Advice Review occupied a great deal of our attention. We engaged on multiple occasions with the independent lead of the review as well as lodging submissions on the issues and proposals papers. We also worked with 11 other advice associations on a joint submission and research. We have also engaged on the ALRC review of Chapter 7 of the Corporations Act.

We have lodged 16 submissions since the start of the year. To the start of December, we have held 78 stakeholder meetings with ASIC, AFCA, the TPB, Treasury, ASX, Cboe and other associations as well as with the government and opposition.

We also facilitate the industry coming together as a community. Through our committees we have started developing consistency of practice on key issues so that there are benchmarks across the industry. Our hybrid conference in May this year attracted members from around the country to the face-to-face event, as well as online, and the atmosphere at the Sofitel was fantastic. Next year will be in Sydney again and purely face-to-face.

On the professional development front, SIAA has delivered 24 webinars since January, which provided over 55% of the required CPD that members need, including the hard-to-get Client Care and Practice and Professionalism and Ethics categories. Attendance at our conference would have provided another 15 hours of CPD. We also offer excellent training workshops on issues such as market manipulation, introduction to stockbroking and what a day in the life of a trade looks like.

A new Constitution
This year saw SIAA’s members vote to introduce a new Constitution for the Association, which modernises the document, removes clauses that are redundant and aligns it with the Corporations Act and the Association’s activities. The new Constitution ensures that our governance framework remains up to date and relevant.

Season’s greetings
The team at SIAA extends our best wishes to all for the festive season. These past few years of pandemic lockdowns, market volatility and regulatory overload have been challenging. Our members rose to that challenge, serving the interests of investors in gaining access to the opportunities for wealth generation as trends accelerate and companies primed to ride those trends seek capital.

The team at SIAA and I hope that all may enjoy a well-deserved break and we look forward to continuing to support ethical and efficient markets in 2023.