AMP’s half-hearted enforceable undertaking on giving clients “appropriate” advice before switching their superannuation savings into AMP products limped past a minor marker yesterday with the announcement that they had appointed Deloittes as their external advisers to ensure they’re complying with the deal they cut with ASIC.

It’s nothing for AMP or ASIC to be proud of. AMP still hasn’t even made its offer of file reviews to the 7000 switched clients and won’t do so until sometime next month. (The Oz story says a mail-out “is expected to be under way soon”.) Amazingly, AMP isn’t sufficiently self-interested to automatically carry out its own review of its financial planners’ sub-standard performance. Maybe they don’t really want to know.

For ASIC, the Deloittes appointment is just another example of the way our watch puppies are effectively outsourced – a tacit admission that they don’t have the personnel or the expertise to keep an eye on their charges themselves.

It’s the same with APRA – the NAB has been making a dozen or more consultants much richer as it tries to convince the prudential regulator it’s a good little bank again. It seems APRA isn’t capable of knowing that itself and thus NAB has to receive a tick from the various “experts” it pays to do APRA’s job.

It’s an interesting model. Perhaps the state police departments could adopt it and save all that money they waste on, say, traffic cops. If a motorist breaks the rules, instead of all that messy and expensive business of fines and court cases, the vetting of his or her subsequent driving performance could be outsourced to the local garage. The motorist of course would pay for that vetting procedure.

No, it wouldn’t really work.

Peter Fray

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