Clicky

FSC backs RC final report, gets on with task ahead

Now that the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry’s final report has been released, the Financial Services Council (FSC) says it’s time to “get on” with the task of strengthening Australia’s financial services industry.

In a statement following the release of the report, FSC chief executive officer, Sally Loane, said the FSC welcomed the release of the Royal Commission’s final report, which presented the industry with “an opportunity to rebuild” the relationship between financial services and the community.

The FSC showed strong support of the following recommendations:

  • A person should be defaulted once into a superannuation account;
  • Retention of the twin peaks regulatory model;
  • Greater clarity around the co-regulation of superannuation by the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission (ASIC);
  • Industry wide reference checking of financial advisers;
  • Regular reporting of serious compliance concerns to ASIC; and
  • Entities having a stronger focus on culture and governance.
Related News:

Loane said the recommendation that there be an industry funded ‘Compensation Scheme of Last Resort’ would take further consideration.

“This will only work if the underlying licensing system is strengthened to ensure licensees meet their obligations,” she said.

“We support stronger professional indemnity and capital requirements for licensees. These should be in place before any further consideration of a compensation scheme of last resort. If this is not done it may even encourage inadequate products and services coming into the market that lead to poor consumer outcomes.”

The extension of the Banking Executive Accountability Regime (BEAR) regime to all APRA-regulated financial services institutions and extending it to non-prudentially regulated financial services firms would also take further consideration.

“While we agree with the Commission that there should be appropriate consultation, we would like to see how BEAR works for ADIs in practice before we consider any extension to the existing regime,” said Loane.

 

 

 




Related Content

Compensation scheme is treating symptoms not causes

The need for a compensation scheme of last resort is highly debateable in circumstances where most of the problems lie with 44 separate, small and und...Read more

RC didn’t dive deep enough on superannuation

AustralianSuper’s chief executive, Ian Silk, has suggested that the Banking Royal Commission didn’t cast a stern enough eye over parts of the supe...Read more

FSC code doesn’t address ‘junk’ insurance

Group insurance should be the subject of an enforceable code of conduct overseen by the Australian Securities and Investments Commission (ASIC) in cir...Read more

Author

Comments

Comments

I note that Sally Loane hasn't made mention of the ridiculous proposal to reduce Risk Insurance commissions to zero.
This is because prior to the Life Insurance Framework, the FSC wanted this to occur then and pushed for massive reductions in commissions, but has more recently stated that advisers really earn the commission they receive for risk insurance advice !!!
The FSC prior to the outcomes from the LIF put out media releases stating their preference was that Risk commissions should ideally be eliminated.
There has seemed to be serious contradictions in the messages, however, one can only imagine the FSC is now jumping with joy at the potential for this to happen.

With a labor government in 2021 we can be assured that they will attempt to legislate nil commission on life insurance. I made the mistake of thinking that life commissions weren't on the chopping block, should have sold my business 12 months ago. Now it'll be worth nothing in a few years time.

I notice Sally Loane hasn't mentioned risk insurance commissions. This could be because she was unable to answer simple questions put to her in the Royal Commission and showed her complete lack of industry knowledge?
After the dodgy FSC members were at the heart of most of the RC scandals she should probably start backing a lobbying push to end the LIF which her cartel lobby group pushed through by corrupt means.
Perhaps someone should explain to her that the plan to get rid of risk advisers and sell junk direct insurance has now backfired because the FSC's members can't make this profitable without their criminal direct selling practices (now doomed post RC).
So without us risk advisers the FSC wanted to get rid of your risk insurers don't have much of a future either. The LIF has seen your members adviser new business plummet so unless you fix the LIF your doomed as well. You reap what you sow!

Add new comment