Current campaigns
Finsia’s campaign priorities in 2009 are:
Navigating reform: the financial services crisis and Australasia's response
In early 2009, Finsia commissioned Access Economics to review the conceptual framework underpinning banking and financial services regulation in Australia and, in light of the GFC, provide recommendations. The results of this review are contained in the Navigating Reform - Australia and the Global Financial Crisis research report, which was released on 13 October 2009. The Hon. Minister Chris Bowen MP, Minister for Financial Services, Superannuation
and Corporate Law, provided the keynote address at the report launch.
The report includes a critical appraisal of the current regulatory system and highlights key issues for regulators going forwards. The review:
- examined the Global Financial Crisis, including its causes, what has worked well and what has not worked during the turmoil, and how Australia’s experience compares with the rest of the world;
- defined the key issues that regulators need to consider going forward; and
- drew on Access Economics’ expertise and canvassed input from industry specialists to come up with suggested solutions to these key issues.
The report is structured around four key questions that arise from Australia’s experience of the GFC. These are:
- Why was Australia’s experience of the GFC comparatively benign?
- What have we learned about financial markets and their regulation?
- How might we change our regulatory arrangements in light of the GFC?
- Can Australia’s experience of the GFC be used to press our strengths as a regional financial centre?
In addition, a survey conducted shortly before the release of the Navigating Reform - Australia and the Global Financial Crisis research report, indicates that while finance industry professionals concede the need for greater governance and enforcement, they largely agree that the underlying strength of Australia’s financial regulatory environment protected us from the worst of the Global Financial Crisis.
Australia as a regional financial services hub: the talent dimension
In the first stage of this policy initiative, research conducted by Roy Morgan Research provided preliminary insight into the key structural impediments facing the financial services industry in attracting skilled employees. The research Closing the talent gap: Building a global financial centre examined the patterns of the Australian workforce over a 10 year period between 1997 and 2007 (and the significant trends influencing this period).
In the second stage of this policy initiative, Finsia engaged in qualitative research to deliver further insights to our members. Roy Morgan Research steered and informed discussion at Finsia's senior industry roundtable in August 2008. The roundtable brought together senior HR executives, industry experts, key government contacts and senior Finsia Fellows to further examine the key policy challenges and opportunities facing the industry. Elizabeth Broderick, Australia's Sex Discrimination Commissioner, addressed delegates.
Following the formation of Finsia's Talent Advisory Taskforce, in late 2008, Finsia (in partnership with Roy Morgan Research) conducted a member poll on the impact of the current crisis on employment. In the poll survey, Australia as a financial services hub: the talent dimension, Finsia members indicated that Australia's talent shortage has not disappeared and, when the markets recover from the current crisis, the shortage will be greater than
before.
More recently, Finsia's Talent Advisory Taskforce convened in April to discuss workplace planning in Australia's financial services industry and how this has been impacted as a result of the global financial crisis. The meeting commenced with a presentation by demographer and commentator Bernard Salt, who examined the demographic fault line running through the Australian workforce and much of the developed world, which threatens to impact negatively on the supply of labor and talent during the next decade.
A survey report Broadening horizons – investing in talent was formally launched at the inaugural Finsia Financial Services Conference on 28 October 2009. The Finsia/Chandler Macleod Group survey reveals that 75 per cent of respondents believe that organisations are using the economic downturn as justification for cutting staff in stagnant areas of their business, while at the same time recruiting to build teams
in other areas. The report provides an examination of the attitudes, expectations and employment experiences of Australian financial services professionals one year on from the immediate fallout of the Global Financial Crisis.
In the context of the current crisis, Australia's financial services industry remains well regarded internationally, however, our ambition to become a regional financial services hub requires us to take the long-term view. Building on our talent initiatives undertaken last year, we are currently investigating research options, with a focus on retaining talent during this economic downtown. It is envisaged that this research will explore methods for keeping employees motivated, with particular focus on the generational divide which commonly exists in the workplace, and the inherent
motivational drivers. We are also interested in examining the attitudes and perceptions held by current students and recent graduates in the finance/business disciplines in the wake of the financial crisis.
New challenges in consumer finance
The second Finsia-Melbourne Centre for Financial Studies Consumer Finance Symposium was held on 27 August 2009 at the Windsor Hotel in Melbourne. Senator the Hon. Nick Sherry, Assistant Treasurer, provided the keynote breakfast address This year the morning workshops focused on the scope and impact of the proposed consumer credit protection amendments, the relationship between responsible lending and financial literacy and the impact of the GFC on the generational wealth divide.
In relation to the impact of the GFC on the generational wealth divide, as part of the Symposium, Finsia launched the Changing tides – consumer finance and the generational wealth divide report. The GFC, and the ensuing impact on the real economy has exposed some Australians for the first time in over a decade to the consequences of excessive leverage and inadequate financial planning.
In the decade immediately before March 2008, there was both a marked shift in income earning and wealth accumulation from younger to older Australians and a significant increase in credit card debt and mortgage stress. In response to these findings, which are set out in the Finsia-Roy Morgan Reconciling wealth with leverage – new challenges in consumer
finance (August 2008), Finsia commissioned UMR Research to examine the impact of the GFC on the generational wealth divide. The 2009 research results provide fresh insights on a broad range of issues including household debt and savings levels, retirement planning and investment strategies.
In the long grass – leadership in adversity: Climate change, ESG and the finance industry
In the first stage of Finsia’s research for this policy initiative, a study of senior finance industry representatives engaged in Environmental, Social and Governance (ESG) activities was conducted in 2008 by Finsia in association with Griffith University’s Sustainable Business Research Initiative.
The preliminary findings were released on 19 May 2008, including the report Is the financial services industry ready for climate change? This report was used to inform Finsia’s workshop at the National Business Leaders Forum on Sustainable Development at Parliament House in Canberra. The study raised serious concerns that if Australia’s pace
of engagement with the ESG agenda fails to accelerate, opportunities in capital attraction, skills development and retention, and thought leadership will be lost to foreign markets.
The results suggested that a broad-based response across the financial services industry, academic institutions, industry bodies and government is needed to take advantage of the opportunities that climate change initiatives present and to determine and mitigate risks.
In the second stage of this policy initiative, 10 focus groups were held based on the five industry sub sectors:
(1) Financial Planners; (2) Brokers & Sell-Side Analysts; (3) Fund Managers, Buy-Side Analysts & Asset Owners; (4) Investment Bankers & Venture Capitalists; and (5) Bankers & Lenders. The findings of these focus groups formed the basis of a report, The financial services industry beyond Kyoto: Capacity building for climate change.
This report informed the joint Finsia-Institute of Actuaries of Australia Low carbon economy: risks and opportunities for the financial services industry event, which was held 9 October 2008. In commenting on this report, Finsia's Chief Executive Officer, Dr Martin Fahy F Fin, noted that, despite the education and training efforts of climate change professionals, considerable confusions continues to surround the terms of the debate and the significant role the financial services industry can play in transferring to a low carbon economy.
In conjunction with Griffith University Business School, Finsia launched the final stage results of the research project at the In the long grass – leadership in adversity conference held in Sydney on 7 May 2009.
This report includes a projection of the potential impact of emissions pricing, reporting systems and opportunities for emission reduction on investment valuation, risk assessment and advisory services, and the identification of the research and delivery streams that will need to commence. The focus is on the capacity of financial services industry sub-groups to proactively incorporate these issues into their investment and advisory practices.
Also included in this publication are contributions from experts on the science of climate change, ESG factors and the evolution of trustees’ fiduciary duties, and carbon risk management in the context of the reporting obligations under the proposed Carbon Pollution Reduction Scheme.