Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Financial Advice

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GUEST OBSERVATION
The wealth profile of Australian households has changed phenomenally over the past 25 years, according to a <a href="https://www.fundingaustraliasfuture.com/sites/fundingaustraliasfuture.com/files/papers/Australian_Household_Sector_Finances.pdf" target="_blank">recent paper</a> from the Australian Centre for Financial Studies. Thanks to increases in asset prices and the introduction of compulsory superannuation in 1992, most households are much wealthier than those of previous generations. Total household wealth in 2013 reached $6,689 billion, six and a half times the level of household wealth in 1988.
From an aggregate point of view, as RBA data shows below, the net wealth trend line has been positive and increasing with one noticeable blip – the global financial crisis in 2007-08.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/56576/area14mp/t9y8ht9g-1408070072.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/56576/width668/t9y8ht9g-1408070072.png" alt=""></a>
Source: Author provided
As of the end of 2013, dwellings comprise more than half the value of household assets (54%); superannuation and life policies account for a further 25%; with consumer durables (such as motor vehicles and household furnishings) at 3%. This provides an interesting contrast with 1988, where again dwellings accounted for around half the value of household assets (51%); superannuation and life policies 17%; and consumer durables 10%.
While the value of assets has gone up, so too has household debt. In 2013, total household liabilities, mostly debt, stand at around half (49%) of the value of household financial assets, or around one-fifth (21%) of total assets. So, for every dollar in debt, households have, on average, about $2 in financial assets and around $5 in total assets.
This compares to the situation in 1988, when total household liabilities stood at around one-third (33%) of the value of household financial assets, or around one-eighth (13%) of total assets. In 1988, for every dollar in debt, households had, on average, about $3 in financial assets and around $8 in total assets.
By age and income
While overall household wealth is increasing, there are some very marked variations when the data is segmented by age and income levels.
An examination of net wealth by age group reveals a lifecycle pattern to consumption. This is well expressed by the figure below, which provides an excellent stylised view of the use of financial assets as a means of smoothing consumption through the lifecycle.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/56577/area14mp/kt925q5k-1408070132.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/56577/width668/kt925q5k-1408070132.png" alt=""></a>
Source: Corrigan and Matterson (2009), Author provided
Assets are accumulated through the use of human capital from the beginning of a working life. Debt is used to supplement income to further finance assets, which is then paid down pre-retirement. Net wealth is then expended in retirement.
In retirement, the capacity for an individual to support oneself through human capital is much reduced. Therefore, households need to ensure sufficient financial resources have been accumulated for consumption for discretionary purposes – especially in the more active early retirement phase – and to cover the potential increase in health-care costs in the later stages of retirement.
Just as Australians have been consolidating their wealth, a second major trend has been the rise in longevity. Life expectancy for men has risen from around 65 in the early 1900s to around 85 today. While increased wealth bodes well for financial well-being in retirement, steps must be taken to preserve and protect retirement savings to last for what can be around 20 years on average, after the completion of working life.
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/56578/area14mp/f7csvq86-1408070203.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/56578/width668/f7csvq86-1408070203.png" alt=""></a>
Household net worth by age profile ($’000, mean value, Australia, 2011-12). Source: Reserve Bank of Australia, 2013, Author provided
Article continues on the next page. Please click below. 
<hr class="system-pagebreak">
A skewed distribution of net wealth
Within a defined contribution superannuation system, the need for both advice and products to assist consumers to manage investment and longevity risk to ensure a comfortable and self-reliant retirement is a priority.
However, for some households, managing wealth is not an issue. Australia, as in many OECD countries, has a skewed distribution of net wealth, with the bulk being held by a relatively small number of households. The wealthiest 20% of households hold around 61% of total household net worth, averaging $2.2 million per household.
On the other hand, the poorest 20% of households account for just 1% of total household net worth in Australia, with an average of about $31,000 per household. Mean household net worth in Australia for the period 2011-12 was around $728,000 (consisting of $858,000 assets and $130,000 of liabilities).
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/56581/area14mp/7kj39ynk-1408076145.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/56581/width668/7kj39ynk-1408076145.png" alt=""></a>
Source: ABS, 2013
So not everyone in Australia is getting wealthier. Many households face financial exclusion where: "Individuals lack access to appropriate and affordable financial services and products - the key services and products are a transaction account, general insurance and a moderate amount of credit."
A 2013 Australian <a href="https://www.financialliteracy.gov.au/media/465159/nab_csi_measuring_financial_exclusion_in_australia_2013.pdf" target="_blank">study</a> found that 18% of the adult population were either fully excluded or severely excluded from financial services in 2012. Just over 1% of adults were fully excluded – they had no financial services products – and almost 17% of adults were severely excluded in that they only had one financial services product.
In all, this means more than three million Australians are either partly or fully financially excluded.
What do Australians need from financial services?
Despite the fact that Australians are getting wealthier, financial literacy is not increasing at the same rate. There is a gulf between what households actually do and what may be in their best interests to do. The complexity of the problem means that households need assistance in making these decisions.
The need for guidance is so critical that it must be available in multiple forms. In addition to traditional financial advice, embedded product and/or technology-based guidance may help nudge households toward better decisions.
Households are also exposed to a multitude of financial-related risks – market inflation, longevity, health, leverage and climate risks to name a few – which are simultaneously dynamic, complex and can manifest over different time horizons. In addition to improved guidance, households need a more complete menu of solutions to help manage these risks.
To make this guidance and risk management as effective as possible for households, they require a complete set of financial “building blocks”. Without these, some household risks loom large: for example, longevity risk remains a real consideration for households, increasingly so as the population ages.
Furthermore, there is an implicit assumption that all Australians have equal access to, and benefit equally from, the financial system. This is not the case. Large segments of the population suffer from financial exclusion: they have either limited or incomplete engagement with critical channels of the system. Measures specifically targeted at closing these gaps should be a priority.
Finally, to facilitate the innovation required to meet these challenges, regulation must be flexible, responsive and oriented towards meeting the needs of households. One immediate reform would be to promote further innovation in the area of retirement income products.
Building a financial system that serves Australian households requires a range of approaches if we are to build an inclusive and more equitable society.
Deborah Ralston is professor of finance and director at <a href="https://www.australiancentre.com.au/" target="_blank" style="line-height: 1.3em;">Australian Centre for Financial Studies</a>
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Good financial planning is essential and millions of households are missing out

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GUEST OBSERVATION
The decision by the Coalition government in Canberra to push forward with plans to reform the regulatory regime around the provision of financial advice has received strong opposition from a number of quarters.
The Future of Financial Advice (FOFA) was originally the product of a Labor government seeking to address the consequences of high-profile corporate scandals and now their appropriateness and effectiveness is being called in to question.
In addition to a number of tweaks to provisions addressing conflicts and fees, perhaps most controversial is the government’s proposal to eliminate the catch-all requirement, included alongside a laundry-list of detailed prohibitions and mandates, that an adviser always act in the ‘best interest” of his or her client. There would seem to be nothing objectionable to that in principle and most clients would be shocked to have an adviser look them in the eye and say quite frankly that the advice they were providing was not in their best interest.
What is important to keep in mind, though, is the purpose of financial regulation and what the impact of open-ended, catch-all provisions is on how business is actually done day-to-day. A regulatory regime is a specially-crafted set of rules and procedures for a particular industry – in this case, financial services – that sits on top of the older and broader legal system which is of general application to the sum total of human activity. Where the statutes and judicial decisions that demarcate the boundaries of common law and equity are general in scope and to a large extent backwards looking, financial regulation is highly specific and meant to map very closely what is done in the industry currently and in the foreseeable future.
The difficulty with broad, vaguely drafted catch-all provisions becomes clear when you understand how they will be applied in practice. Imagine a rule with 17 specific requirements and prohibitions. The firm or individual seeking to comply with that rule proceeds to ensure that they are on the right side of each element. Sometime later, a regulator looks at their actions and determines that, even though fully compliant with the 17 explicit provisions, there is still for some reason something wrong in hindsight with what has occurred. But if the point of a financial regulatory regime is to be as specific as possible, what purpose does such a catch-all provision serve, especially considering that there are well-developed bodies of law, including the laws of fraud and misrepresentation, which already exists and can be relied on whenever needed?
In that light, such vague provisions can be seen as simply a “do-over” for regulators unable or unwilling to build out their case under the more explicit and detailed sections of the rulebook.
It is easy to confuse “more regulation” with “better regulation.” With every financial crisis there is the battle cry for more rules! What is actually needed in many cases is simply rules that more correctly reflect the actual problems and inefficiencies and pitfalls that have developed in the market recently. The sheer number of pages in the rule will tell you very little about how effective oversight will be.
Opponents of the Coalition’s reform proposals will say that their goal is iron-clad protection for consumers. Clearly, an admirable aspiration, when taken by itself. However, let’s not forget that the purpose of a financial regulatory regime is not to bring the level of risk down to nil. Of course, it is possible to do this, but then the volume of transactions will decline sharply and the vast financial machine of investment and savings would sputter to a halt. Instead, the goal is to maintain a level of investor protection that is acceptable while fostering a financial system that provides the economic goals, such as growth, that have been deemed essential for national prosperity.
I often give as an example a referee who is in charge of overseeing a soccer game. Too little involvement, and the game will degenerate into violence. Too much involvement, and the game will be a cacophony of whistles and flashing yellow and red cards. In either respect, the game being played will not be a game of soccer.
Where specific changes to specific rules are needed, then this can be made discreetly and with great effect. Vague catch-all provisions that in effect give regulators after-the-fact a second bite at the apple to focus on actions not previously identified as problematic merely serve to place clouds over firms and individuals that impede decision-making and create uncertainty for little clear purpose.
Timothy Spangler is adjunct professor at <a href="https://www.ucla.edu/" target="_blank" style="line-height: 1.3em;">University of California, Los Angeles</a>.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Understanding the limits of financial regulation

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GUEST OBSERVATION
The government today is set to bow to public and industry pressure to ensure that commissions remain outlawed under its controversial financial advice legislation.
Finance Minister Mathias Cormann is expected to announce that a rewrite of the legislation proposed by a Senate inquiry will be undertaken.
The government has faced a storm of protest over its plans to water down Labor’s Future of Financial Advice (FoFA) law, weakening consumer protection and benefiting the banks by permitting the payment of commissions for “general advice” given by bank employees that dealt with bank products.
The government members of the Senate inquiry say in their report, tabled last night, that the legislation’s explanatory memorandum should make it clear “that it is not the government’s intention to reintroduce commissions”.
The provisions governing “conflicted remuneration” should be redrafted to make them clearer, the report says.
The distinctions between the terms “information”, “general advice” and “personal advice” should be made “much sharper and applicable in the practical sense” in relation to allowing exemptions from conflicted remuneration.
Bank employees would still be able to receive bonuses and incentives but not commissions related to products.
The report says a number of submissions strongly objected to the amendment broadening the exemptions from conflicted remuneration. They came not only from consumer groups but from a range of industry groups.
The bill’s intention is to enable a business, under certain circumstances, to give general advice to retail clients on its own products, the report says. The present law needs to be changed to remove “unnecessary complications” around the provision of general advice. But the committee is concerned about the confusion surrounding the proposed changes “and the fear that they have the potential to reopen the door to commissions”.
The committee also notes the concerns about the possible misuse or misunderstanding of the term “general advice”.
Labor and the Greens put in dissenting reports opposing the government’s legislation.
Cormann took over carriage of the legislation from Arthur Sinodinos, who had to stand aside as Assistant Treasurer when called as a witness before the Independent Commission Against Corruption. Sinodinos was seen as very sympathetic to the banks' demands.
The pressure on the government to alter its legislation intensified because of the revelations about fraud by the financial planning business of the Commonwealth Bank, followed by the Bank’s bad handing of the scandal. The Bank has paid out $52 million in compensation to about 1100 customers but now could be forced to pay hundred of millions of dollars more.
The concessions on the financial advice legislation comes as today’s Newspoll shows the Coalition trailing Labor on the two party vote 47-53% The Coalition’s primary vote rose one point to 37% and Labor dropped one to 36%, in the past fortnight. Support for independents and micro parties has climbed to a record high of 17%.
Michelle Grattan is one of Australia's most respected and awarded political journalists. Michelle currently has a dual role with an academic position at the University of Canberra and as associate editor (politics) and chief political correspondent at The Conversation.
This article was originally published on <a href="https://theconversation.com/" target="_blank">The Conversation</a>. 
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Government to tighten its financial advice changes to rule out commissions

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A Melbourne man who claimed to be a financial planner faced the Magistrates’ Court this week, charged over his involvement in a <a href="https://www.smartcompany.com.au/legal/42108-business-group-swindled-out-of-800-000-through-fraud" target="_blank">fraud</a> scheme said to be worth $100 million over 10 years.
<a href="https://www.theage.com.au/victoria/poker-pro-faces-142-charges-over-100m-fraud-20140528-394ev" target="_blank">Fairfax reports</a> Bill Jordanou, 55, faces 142 charges relating to 40 incidents between 2004 and 2013, including more than 100 charges of “obtaining a financial advantage”, often in the form of home loans and electronic transfers into home loan accounts.
Jordanou is also facing charges related to obtaining property by deception, conspiring to defraud the Commonwealth Bank, ANZ Bank, Bankwest, Bank of Melbourne and Bank of Queensland, conspiring to pervert the course of justice, and the theft of a Mercedes-Benz.
Prosecutor Luke Excell told Fairfax Jordanou is “alleged to have drawn funds using false client approvals and invoices … then used it across various property developments as well as maintaining a lifestyle.”
Excell said Victoria Police became aware of Jordanou’s activities, and those of his associates, when the Commonwealth Bank discovered a number of loan applications lodged on behalf of Jordanou’s clients were supported by false documents, including ATO documents, letters of employment and financial statements.
The bank lodged complaints against accounting firm Zaia Arthur &amp; Associates, where Jordanou was working as a “financial adviser” at the time.
SmartCompany attempted to contact Zaia Arthur &amp; Associates this morning but the phone number listed for the firm has been disconnected.
Jordanou’s lawyer, George Defteros, told Fairfax his client has “been waiting for these charges for two-and-a-half years … and we welcome these charges because Mr Jordanou wants to get on with his life”.
Mark Rantall, chief executive of the Financial Planning Association of Australia told SmartCompany there are a number of rules individual investors and small business owners should follow to safeguard themselves against unsound financial advice.
Rantall says the "golden rule" is to always check the qualifications of the person giving the advice and to make sure they are a member of the FPA, which is the national professional association for financial planners.
“The second golden rule is that if something sounds too good to be true, it usually is,” says Rantall. “If you are being offered a get-rich-quick scheme, the risk associated with that scheme will be extraordinarily high.”
“The third rule is that your financial planner should spend more time talking about you and your investments, than themselves and the products they may be offering,” says Rantall.
Rantall says it is also important to make sure your financial plan matches your own personal risk profile, and that your investments are diversified across different products and different asset categories.
“The final thing would be to make sure you keep you to date with your portfolio and that you always feel comfortable with the investments being recommended,” says Rantall. 
A spokesperson for the FPA told SmartCompany individuals and business owners who are concerned about receiving sound financial advice can use the <a href="https://fpa.com.au/find-a-planner" target="_blank">“Find a Financial Planner” function</a> of the FPA’s website to find an expert, as FPA members are held to higher professional standards. 
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Melbourne financial planner faces court over $100 million fraud charge

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GUEST OBSERVATION
A damaging admission by the Commonwealth Bank will boost concern about the government’s plan to weaken protections for consumers seeking financial advice and throw into doubt its timetable for announcing changes.
The bank’s earlier failure to provide a parliamentary inquiry with full information about its handling of the aftermath of financial advisers' misconduct has forced a last-minute delay to a Senate report into the affair.
The bank now admits not all the relevant clients were contacted and offered the promised $5,000 to help them get fresh advice. More than 4000 cases are now to be dealt with.
Full information was apparently withheld by the bank for some time from the inquiry and from the Australian Securities and Investments Commission.
The government’s proposed changes to Labor’s Future of Financial Advice (FoFA) law would advantage the banks. They would apply the ban that exists on “conflicted renumeration” only to the provision of personal advice - exempting general advice provided by employees of banks and product manufacturing institutions.
The controversial package was put on hold for further inquiry and consultations. Seniors groups have been particularly critical.
Finance Minister Mathias Cormann is anxious to finalise the measures quickly and does not want to revise them substantially.
But what the Senate economics references committee on Wednesday described as “surprise developments” – the production of new information from ASIC and the bank - will increase suspicion.
The committee, investigating the performance of ASIC, had been due on Friday to present a report expected to be very critical of the bank.
One of the committee’s main concerns has been the misconduct of some financial advisers in Commonwealth Financial Planning Ltd (CFP), part of the Commonwealth Bank of Australia Group, and ASIC’s response to allegations of wrongdoing.
The committee said in an interim report on Wednesday that it was particularly interested in the adequacy and integrity of the ASIC-approved compensation arrangements for affected clients.
It had been well advanced in preparing its report when on May 16 ASIC and the CBA advised there were inconsistencies in the way in which the compensation arrangements had been applied.
“This revelation suggested that, for some time, the CBA had not kept either the committee or ASIC full informed about the compensation process for clients affected by serious misconduct within CBA’s businesses,” the interim report said.
Although ASIC and the CBA had attempted to correct the record, the committee said the evidence provided was “sketchy” and many questions were left unanswered.
Committee chairman, Labor’s Mark Bishop, said these included how many affected clients were “kept in the dark by the CFP, for how long, and the number who missed out on the offer of $5000 to help them pay for an expert assessor to assist their claim”.
Concerned it might still not have a full understanding of what had happened, the committee has asked for more information from ASIC and the bank.
Bishop tweeted that he was alarmed that “ASIC says over 4000 clients affected by inconsistent approach CBA applied to compensation measures. Maybe ten of thousands”. The latter number is a reference to possible unidentified clients.
The committee’s final reporting date has been delayed to no later than June 26.
The Senate economics legislation committee, with substantially overlapping membership with the ASIC inquiry, is examining the proposed FoFA changes.
It will report on June 16 and Cormann has planned to announce the government’s position immediately after that.
But the government could expose itself to more criticism if it did not wait until the report dealing with the Commonwealth Bank.
Chairman of the Financial Planning Association Matthew Rowe told The Conversation one would expect the latest development would push out the timetable for the government’s announcement.
His organisation, a professional body representing financial planners, has written to Cormann with its concerns about the reintroduction of commissions. It says the selling of products should be clearly separated from providing professional advice.
“Consumers are becoming increasingly suspicious of the behaviour of some of our major institutions,” Rowe said.
“The government needs to take great care with the arguments of those with significant vested interests where there is a real and significant public interest at stake.”
On FoFA the government is trapped in the triangle of what it wants to do, what politically it should do, and what the Senate will allow it to do.
<img src="https://counter.theconversation.edu.au/content/27285/count.gif" alt="The Conversation" width="1" height="1">Michelle Grattan is one of Australia's most respected and awarded political journalists. Michelle currently has a dual role with an academic position at the University of Canberra and as associate editor (politics) and chief political correspondent at The Conversation.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. 
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Commonwealth Bank behaviour sends more warning signals about Liberals' financial advice changes

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GUEST OBSERVATION
Following last week’s public hearing, the Senate Economics Legislation Committee is preparing to report on its <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/FOFA" target="_blank">inquiry</a> into a government bill that would significantly water down the Future of Financial Advice (FOFA) legislation.
The legislation banned “conflicted remuneration” - commissions provided to advisers and financial planners by the producers of financial investment products such as banks and wealth management firms. FOFA also required bi-annual renewal of any ongoing fee agreements between investors and their planners on an “opt in” basis, and made it the duty of financial services providers to advise and act in the “best interests” of their clients.
The government argues the “streamlining” of FOFA will help to “cut red tape” and reduce costs to consumer investors. Unfortunately, while there is always room for fine-tuning new legislation to “streamline” it, the government’s proposals do far more. They seriously undermine the consumer protections in the FOFA legislation and, in some ways, take investors back to the pre-FOFA position.
Banks win under a ‘streamlined’ FOFA
While not attempting to reinstate product-based commissions for personal advice, the government’s bill does propose to allow them for “general advice”.
Bankers, planners and lawyers may understand the difference between “personal advice” and “general advice”, but the subtleties of this distinction may be lost on consumers in real-life situations. A bank employee may say to a consumer, “This product is very good for people (in general) of your age with your income/asset position,” without considering the consumer’s particular needs, objectives and financial situation. This is “general advice” only but under the current legislation, the employee still may not receive a commission if the consumer invests in the product as this would be “conflicted remuneration”.
The government proposes to exempt such “general advice” from the ban on commissions. Further, there will be almost no restrictions on commissions when the result of the conversation between the bank employee and the customer results in a basic banking product, general insurance or life insurance. Not surprisingly, this is one area where consumer groups agree with the Financial Planning Association of Australia (FPA) as the latter is concerned at the decline of properly remunerated personal advice and the total domination of a “sales culture” built on commission-driven “general advice”.
Where the consumer groups and the FPA part ways, however, is on the issue of bi-annual renewals. Currently, under FOFA, a planner or adviser who is receiving ongoing commissions, either from product issuers for old pre-FOFA investments, or directly from the client, must notify the client every two years and allow them 30 days to “opt in” and renew the ongoing fee arrangement.
Best practice for all
The government proposes removing this requirement and returning to the old pre-FOFA “opt out” situation. This is despite strong evidence, from many sources including ASIC itself, that large numbers of consumer investors are “inactive” and that many planners and advisers receiving commissions from these consumers or their investments don’t bother regularly contacting them to review them. Of course, “best practice” in the financial planning industry is to conduct such reviews, annually or bi-annually. FPA members who abide by its Code of Practice would do so.
It is surprising, therefore, for the FPA to oppose this requirement and to support the government’s attempt to “streamline” it away. Other financial services products, like house and car insurance, are renewed annually and consumers are given notice and opportunity to consider the product and shop around. Why not investments? Informed and updated consumers regularly considering their investment performance and their fee arrangements with their planners and advisers makes for a better-performing investment industry and confident consumers.
FOFA also repealed the requirement for advisers to have a “reasonable basis” for their advice and replaced it with the obligation to act and advise in the “best interests” of the client. This duty, however, can be satisfied if the adviser can prove they complied with a “checklist” of quite specific obligations followed by the general requirement to consider “any other step” that was in the client’s best interest. This last requirement is the only item in the relevant sub-section that actually mentions “best interest”. The government is proposing to remove this last “catch all” provision, saying it is too open-ended and “creates uncertainty”.
Most professionals have open-ended obligations which require the exercise of professional judgement. While their insurers produce checklists to help manage risks, these are no defence to a claim of professional negligence. Indeed, the principles of the law of negligence itself, which apply to everybody, not just professionals, are expressed in general terms such as “reasonable foreseeability”.
If financial planners and advisers want to be seen as a profession and to charge accordingly, they need to accept that not all their obligations can be neatly spelt out for them in a legislative checklist.
Paul O'Shea is senior lecturer, TC Beirne School of Law at University of Queensland.
Paul O'Shea was commissioned to write an analysis for National Seniors Australia on the potential consumer detriments of the Commonwealth government's proposals to "streamline" the Future of Financial Advice reforms. He is affiliated with Queensland Consumers and is a "Friend" (Honorary Life Member) of the Financial Counselling Association of Queensland. He is a member of the Investment, Life Insurance and Stockbroking Panel of the Financial Ombudsman's Service. His private legal practice advises both consumers and financial services providers. 
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Financial advisers must accept that their obligations can't be spelt out in an easy checklist

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People who commit white collar crime in Australia are getting off lightly compared with those found guilty of similar offenses in other countries, a report has found.
Thousands of Australians have lost millions of dollars or been put at risk by the actions of financial planners and credit brokers who have committed fraud, provided inappropriate advice and operated without an appropriate license.
A report by the Australia Securities and Investments Commission has found the penalties that can be imposed for such offenses in Australia are limited in some cases compared with those available to regulators in other jurisdictions.
For example, people who provide financial services without a license in Australia can only be fined up to $34,000. In contrast, the report found that people guilty of the same offenses in the US face maximum fines of $5.6 million. In the UK, the maximum fine is unlimited.
The maximum civil penalty in Australia for giving inappropriate advice is $200,000, while in the UK the maximum is unlimited, and in Hong Kong it is the greater of $1.4 million or three times the benefit gained by the wrongdoer. 
Individuals who broke corporate rules in the US could be sentenced to prison terms of up to 20 years. In Australia, and most other jurisdictions studied, the maximum prison term was 10 years for criminal penalties such as fraud and insider trading. The maximum prison term for providing financial services without a license in Australia is just two years.
The report compared maximum penalties in Australia to penalties imposed for similar offenses in Hong Kong, the United Kingdom, the United States and Canadian province, Ontario.
It found that regulators elsewhere could, in addition to imposing fines and prison terms, remove financial benefits that wrongdoers had obtained through illegal profits or avoided losses. ASIC does not have that power, although it can ask other agencies to bring an action to confiscate the proceeds of crime.
The relatively low fixed fines that ASIC can impose and the fact that it cannot remove the proceeds of crime itself meant that wrongdoers may still profit from their conduct and not be deterred by the penalties, the report warned.
“The maximum fine that may be imposed may be substantially lower than the financial benefit obtained as a result of the wrongdoing,” it said.
The report also found inconsistencies between penalties that could apply to similar offenses under different pieces of legislation within Australia. For instance, offering a financial service without a license attracted a criminal penalty under the Corporations Act with individuals fined up to $34,000, while someone giving unlicensed credit advice could be subject to the same criminal penalty, or a civil penalty of up to $340,000.
Civil penalties in the Corporations Act have been eroded by inflation as they have not increased since they were set in 1992 for individuals and 2004 for corporations. In 2007, it was suggested that the penalties should be lifted following a Treasury review, although no increases were made.
The report is the first of its kind in over a decade and ASIC has recommended further work be done.
Its findings will be fed into ASIC’s submission to the Financial System Inquiry, which closes for comment on Friday, March 28.
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