16th Melbourne Money and Finance Conference 2011 – Retail and Household Finance: Current Issues

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The theme this year’s Melbourne Money and Finance Conference, Retail and Household Finance, was selected due to its current relevance, as reflected in the number of recent inquiries and the range of regulatory proposals relevant to this theme. Researchers this year cautioned policy-makers about future banking regulation saying Competition is not a word in the Basel lexicon. Despite a call for a rethink of the fundamental philosophy of financial services, most discussion focused on the unintended consequences of recent consumer financial regulation. For instance, requirements for responsible financial advice may lead to fewer people receiving advice as advisors exit unprofitable areas. Also, moral suasion by politicians can be counter-productive e.g. ending mortgage exit fees could lead to the benefit of large banks over small.

A key driver of consumer finance is the ability of individuals, when faced with choice, to assess basic statements about risk and their behaviours. A number of papers discussed different aspects of behavioural finance. Based on a survey conducted at the Conference about top issues in Retail and Household Finance, issues identified for top research priority concerns financial literacy and consumer welfare such as, education and quality control of financial advisors, effective communication of financial products and risks to the community, financial innovations for low income earners, and adequacy of retirement savings and post-retirement products.

After the conference, with insights from discussions, papers are edited for publication in JASSA, Finsia’s quarterly Journal of Applied Finance, for the benefit of the wider financial community.

Papers presented:

  • Consumer Payment Behaviour and Views on Making Payments in Australia, Sophia Chong (Reserve Bank of Australia)
  • How bank switching in NZ differs by product: Lessons for Australia, Claire Matthews (Massey University)
  • Post GFC regulation – product innovation, ensuring customer suitability and problem resolution, Nick Hossack (Australian Bankers’ Association)
  • Consumer Financial Protection: Future Directions, Richard Sandlant (The Treasury)
  • ASX Warrants: Are Retail Investors getting a fair go?, Ben Hunt and Chris Terry (University of Technology, Sydney)
  • Retail Derivatives – what we know, what we don’t know and some regulatory challenges, Alex Erskine (ASIC)
  • SMSFs: Can we do better?, Tom Valentine (Macquarie Graduate School of Management)
  • Retail Investors and Ethical Investment, Howard Pender (Australian Ethical Investment)
  • Life-Cycle-Event Financial Products, Kevin Davis and Deborah Ralston (ACFS) and Ross Higgins (Austock Group)
  • Tax Distortions and Retail Investors, Gordon MacKenzie (University of New South Wales)
  • Explaining retirement investment choices: the interrelated roles of information disclosure and financial literacy, Hazel Bateman (University of New South Wales)
  • Post-Retirement Policy, Louise du Pre-Alba (ASFA)

The Melbourne Money and Finance Conference is a unique conference series that brings together invited academics, industry participants and regulators under the Chatham House rule to discuss specially prepared and selected papers on emerging matters of significance in the finance sector.

Contact details:
Australian Centre for Financial Studies
T: +61 3 9666 1050