I had a chance to read your recent paper about tax, regulation, etc. and a possible international response to it from the IFA community.
This is a very important topic you raised: however, on the international scene, there are two very different worlds in competition. The Western world (and mainly Europe) nearly bankrupted with huge cumulated public deficits, and the other (India, China, etc.) doing relatively well.
Why? Because basically Europe is organised as a structured corruption system – not the banal “tip” to the policeman round the corner of the street – something much more vicious.
Our politicians are professional politicians, and in order to get elected, and re-elected, and re-re-elected they need to buy the votes of the citizens through subsidies and grants and social benefits of all nature.
This is why the European economy is down because all those subsidies, grants and social benefits are financed by debt covered by taxpayers’ money: so the citizens are poorer and the economy is running a permanent deficit with no cash available anymore for investment.
To keep this machinery going, politicians need executants – armies of civil servants to control the tax payers, the consumers, the citizens – just to make sure the system works, irrespective of the fact that it ruins the economy of Europe.
Bureaucracy
Today, we reach the limit of the system’s survival with thousands of billions of cumulated debts impossible to repay in even a thousand years.
This is why our industry (like any other – ask the farmers, the truck drivers, etc. how they feel about European bureaucracy…) faces the more stringent regulations imposed by the same bureaucracy.
Europe is trying to export its vision of the world (without much success so far) but its theory of the “politically correct” may gain new audience in Australia, Canada, even China through bodies like IOSCO, the OCDE, the UN, etc.
You are absolutely right when you say that “the tendency for regulators to “get it wrong” can also be compounded by a desire to be the “best”, or at least most professional, from the start” – thus an over-regulated world, slowing down economic development – even if sometimes a few actors (such as the US, India or Russia) say “no” when too much is too much.
One organisation does exist, having started for more than 10 years ago now to defend the concept of freedom and proportionality when it comes to regulation.
Incorporated as a Swiss private foundation, CIFA (Convention for Independent Financial Advisers) is working as a think tank, representing financial intermediaries at the United Nations, for the best interest of their industry and their clients alike.
Just as you say, the aim of CIFA is to “ensure that new regulations, while still achieving their aim of protecting investors, are more suitably aligned to the needs of an increasingly professional industry“.
Vincent J.Derudder is Honorary Chairman and President of The Consultative Committee for the Fédération Européenne des Conseils et Intermédiaires Financiers (FECIF)
Click here to read International Adviser's original opinion piece from last week
