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.
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.