I believe this is a step in the right direction. The financial services sector must accept the cost of compliance professional standards, and the necessary obligations that this entails. ASIC relies on “industry gatekeepers” to take greater responsibility for compliance, we must give them the powers to do so.

On the other hand, the call for a Royal Commission into the Australian banking system is irrational and a politically driven, worthless exercise. It aims to stoke the emotions of an electorate who has a propensity for hating the big banks, will cost taxpayers hundreds of millions of dollars and take approximately three years to complete.

Don’t misread me, I am not for a minute defending the banks. There’s no doubt that many retail investors have been exposed to bad professional practice and poor financial advice, particularly within the banking sector. The banks’ lack of attention to supervisory and compliance obligations has been disgraceful, and their initial response to compensating those affected was cruel and inadequate.

However, it must be clearly understood that these practices did not occur because the regulatory structures were not in place. They were in contravention of the rules and the perpetrators were held to account.

In addition to yesterday’s announcement, in respect to Australian Financial Services Licence (AFSL) advice obligations, I repeat previous calls that I’ve made for the Federal Government to facilitate co-regulatory powers between ASIC and the appropriate professional associations, including the Financial Planning Association of Australia (FPA). This will enable robust practice audits and regulation to be effectively enforced to drive compliance.

We must spend taxpayer dollars effectively, and make full use of resources that already exist. This will be the most effective solution to reach a realistically feasible and effective outcome in a reasonable short time frame, so that we can go about enforcing the rules for the public good.