Clients will be placed at the centre of regulatory and business activities in both the superannuation and insurance sectors in 2019, predicts a financial services consulting firm.
QMV principal consultant Wendy Colaço said this is due to the combined effect of Hayne royal commission recommendations, member outcomes assessments, consumer data right, and financial product design and distribution obligations.
She added that the new prudential standard and guidance on strategic planning and member outcomes, recently released by APRA, will require that superannuation trustees rigorously assess and strive to improve performance in terms of the outcomes they are providing their members.
“This will involve more structured strategic business planning, a greater oversight on expenditure, and closer monitoring of performance towards member outcomes,” Ms Colaço said.
“While the new laws do not commence until 2020, we suggest forward-looking superannuation trustees should move quickly to align strategic business planning with the new requirements as soon as possible.”
Further, Ms Colaço noted a strong alignment between the member outcomes requirements and the proposed financial product design and distribution obligations.
“These proposed new laws require financial institutions and superannuation trustees to ensure that financial products have a clear target market and are designed and distributed to cater to and suit the needs [of] this target consumer,” she said.
“When combined with the consumer data right, the member outcomes and design and distribution obligations will shift the power towards individual consumers, providing opportunities for balancing competition-driven efficiency, and confidence in the financial system.”
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