The Financial Service Inquiry (FSI) should not greatly impact the financial services sector with most recommendations relating to improvements at the margins according to an analysis of the 270 submissions made to the inquiry.
KPMG stated that it had examined all the submissions made to the FSI and found that stakeholders had not identified any substantive reforms that were required but did seek ways to remove overlap between regulations administered across state and federal levels.
"After a period of significant regulatory change, it is encouraging to note that the initial submissions to the FSI do not suggest that the insurance and wealth management financial system requires substantive reforms, rather there is support for simplification and rationalisation, " KPMG Actuarial & Insurance Risk Consulting Partner in Charge James Collier said.
He said there were common themes within the submissions which would shape the potential outcomes of the FSI with the superannuation sector likely to focus on the needs of consumers during retirement phase, enhanced regulations to improve oversight and governance, and the management of systemic risk and liquidity requirements.
Likely changes with the life and general insurance sectors would be around the rationalisation of regulations and the possible removal of state insurance taxes and charges to tackle underinsurance.
Collier stated that higher levels of disclosure and improvements in the quality of advice would also need to take place with the Australian Securities and Investments Commission (ASIC) calling for additional intervention powers to regulate financial services products.
In its analysis KPMG also noted that submissions from different groups of stakeholders had common themes with regulators stating the financial system was working well but still requested additional powers.
Larger financial services companies also believed the system worked well but sought less regulation while smaller players believed they were disadvantaged due to their size.
Consumers stated they were concerned with about the levels of disclosure within the sector and the quality of financial advice and the level of access to financial products available to parts of the community.
