THE Minister for Financial Services and Superannuation, Bill Shorten, was charging down Melbourne's Collins Street last Friday ignoring, in equal measure, the glares and admiring glances of passers-by as all politicians must do.
The day's press release dealt with the sharp rise in the price of strata title insurance in North Queensland following last year's devastating round of natural disasters. To the relief of the insurers, there will be no federal government market intervention.
It was another example of where businesses are warming to Shorten's bent for commercial reality and compromise.
Earlier in the month, the Australian Securities and Investments Commission released proposed guidance on the conflicted remuneration ban under the Future of Financial Advice reforms. One of the proposals is that payments by investment platforms will now be included in "grandfathering" arrangements that essentially allow existing contractual arrangements to continue indefinitely. This was applauded by smaller companies in the wealth management industry which, unlike the big banks, would not have been able to bury margin in other parts of the value chain under the new reforms.
It comes on top of an earlier backdown on client opt-in arrangements for financial planners. As long as planners are members of an ASIC-endorsed code of conduct, they will be exempted from the opt-in requirements.
It's a far cry from earlier in the year when cynics feared Shorten, a former trustee of the giant Australian Super industry fund, wanted to shut down the wealth management industry - all except for the big banks and the industry funds of course.
Regardless of rumours about his popularity among cabinet colleague, Shorten is being seen by some members of the business community as decidedly pragmatic.
But his willingness to compromise seems to be getting little attention from the shock-jock journalists in Canberra who wouldn't know a balance sheet from a bed sheet.
Perhaps the most startling compromise was reached in August with the passing of the Consumer Credit Legislation Amendment (Enhancements) Bill 2012.
When the first draft of the bill was released, in August last year, it said short-term, small denomination lenders, sometimes referred to as pay-day lenders, would be limited to charging an upfront fee of 10 per cent of the total amount borrowed and 2 per cent each month for the life of the loan for values less than $2000. By the time the legislation was passed, and following lobbying from the industry, the upfront fee had been lifted to 20 per cent with a 4 per cent monthly fee allowed to be charged.
Shorten said the reforms would still stop loan sharks from exploiting vulnerable people: "These laws will place reasonable limits on what lenders can charge. The cap on costs appropriately balances consumer protection while still allowing lenders a return that is commercial."
But the industry was delighted as Shorten had acknowledged the role the pay-day lending sector played in "ensuring that important sources of micro finance, such as pay-day loans, can continue to operate as responsible and sustainable businesses".
Consumer groups said they were disappointed at the lost opportunity to better regulate pay-day lending. The Consumer Action Law Centre cited research concluding that repeat borrowing was rife in the industry. "We're not convinced that these reforms will change that," the centre's chief executive, Catriona Lowe, said.
Either way, it could be well argued that regulatory uncertainty in the financial services industry has peaked following the response to the global financial crisis by the federal government and its agencies.
The banks have got improved clarity on their capital requirements and the wealth managers have got better insights on rules relating to the provision of advice. The insurers also have to deal with new capital requirements but the prudential regulator has shown some leniency on that front too.