May 192008

Here’s an issue of some considerable concern.

The Bank of Queensland link is an interesting one, and one which ASIC needs to be looking very carefully at. More than likely, the Bank of Queensland’s business model has allowed this circumstance to eventuate, given that Rowntree’s wife, as Owner-Manager of the branch he worked out of, would have been solely responsible for hiring her husband as an advisor. She must have known that he didn’t hold the appropriate licensing to operate as an accredited financial advisor, yet she employed him. BoQ Owner-Managed branches operate as stand-alone businesses using the Bank’s licence and some of its infrastructure to function. An additional concern in this day and age of a supposedly tightly regulated financial advisory industry, is that an individual can secure a position, giving out financial advice without a licence. Husband of his employer, or no.

Then reading on, we see that Mr Rowntree colluded with two other unsavoury individuals, Messrs Burnard and Camilleri, one of whom is an inveterate liar for profit, the other who is an undischarged bankrupt in a position of control of a number of finance industry entities. He – Camilleri – allowed five of his entities to collapse to the tune of $20 million. We’re not told what punishment the former received, but the latter was slapped over the wrist with 200 hours community service. For mine, both reprobates deserve time behind bars in order that they find out first hand what it feels like to be ‘shafted’.

What I find truly disturbing though, is that ASIC – the Australian Securities and Investments Commission – clearly doesn’t have the necessary regulatory filters in place to stop such people setting up in the first instance. It’s this same body which is to regulate finance brokers in the very near future, under proposed blanket legislation requiring all finance brokers to be licensed under a similar system to that employed by Western Australia. As things currently stand, anyone who wants to complete a Certificate IV in Mortgage Finance – a total furphy in my view – and grease the palm of the relative state authorities, as in WA, can set up as a finance broker. You don’t even need experience in the industry. No lending experience whatsoever. I know of a few brokers myself, who have never been bank johnnies or back-office counter jumpers, but house builders. They have a Cert IV, so life is great. They rely on people like me to show them the way, to get their deals done. It’s akin to teaching a kindergarten-aged child to wash their hands after going to the toilet. They know the advice is coming from someone with far greater experience and knowledge than themselves, but really, why do we have to do X, Y or Z? The most common thing I hear from brokers during any day are the words, "How do we get around that?" Credit policies exist for valid reasons, and it’s not a matter of ‘getting around’ anything. It’s a matter of doing the business which fits the bill. Good, solid, prudent and profitable business for credit-worthy and honest individuals.

The finance game in this country is surely in need of a serious enema if the current load of crap is ever to be expelled.

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