The Minister for Revenue and Financial Services, Kelly O’Dwyer has pointed to the Government’s action on life/risk commissions in the context of the Australian Securities and Investments Commission’s (ASIC’s) most recent report on the supervision of advisers by the major banks.
In particular, O’Dwyer noted that commissions paid on the sale of life insurance products were originally left out of the Future of Financial Advice (FOFA) reforms and this was something which had been addressed by the Turnbull Government.
Commenting on the release of the ASIC report on advice supervision within the major banks and AMP, the minister said it showed that ASIC was taking proactive steps to monitor the financial advice sector’s compliance with the law, and to work with the sector to improve practices, to prevent future harm to consumers.
She said the work had been complemented by the Turnbull Government’s recent reforms to raise the professional, education and ethical standards of all financial advisers, and to remove inappropriate incentive structures for the sale of life risk products to retail consumers.
The professional standards reforms would enhance the financial adviser register, introduced by the Government in 2015, so that consumers could readily access information about their financial adviser, including whether the adviser has been subject to disciplinary action by a relevant compliance monitoring body.
“Commissions paid on the sale of life insurance products were originally left out of the FOFA reforms,” O’Dwyer said. “The Turnbull Government has acted to address the risk that commissions on the sale of life risk products will incentivise advisers to act in a way that is not in the best interests of their clients.”
The minister also noted that the Government had established the ASIC Enforcement Review Taskforce, which would consider and make recommendations to Government on ASIC’s powers and enforcement toolkit.
“We have also committed to putting in place a one-stop-shop for consumer complaints that will provide speedy and independent access to justice, have the power to make binding determinations and to provide compensation,” she said. “The Turnbull Government is taking action now to address the past issues that have occurred in the financial services industry and will continue to implement the most ambitious financial system reform agenda in modern history.”