The data came in response to a question on notice from Greens senator Nick McKim around the status of the government’s response to each of the recommendations from the royal commission.
The update noted that of the 40 recommendations from Kenneth Hayne’s final report delivered in early 2019, 26 had so far been completed.
These included:
– Introducing a best interests duty for mortgage brokers.
– The introduction of annual renewals for advice fees.
– Disclosing to advice clients when their adviser did not meet the legal definition of “independent”.
– Removal of pre-FOFA grandfathered commissions for advisers.
– Prohibition of advice fee deduction from choice super accounts unless annual renewal requirements are met.
– Prohibition of super funds incentivising employers to select funds as a default.
– Introducing civil penalties for breach of trustee covenants.
– Including funeral insurance in ASIC’s financial product regime.
– Application of unfair contract terms to insurance contracts.
– Subjecting ASIC and APRA to regular capability reviews.
Treasury noted that a further 11 recommendations were at the consultation stage, including bringing mortgage brokers under the same licensing requirements as advisers, enacting a national scheme of farm debt mediation, extending the BEAR regime to all super licensees, APRA-regulated institutions and insurers, and establishing a compensation scheme of last resort.
Other recommendations in the consultation stage were those around eliminating exceptions to financial services laws, identifying the fundamental norms of behaviour accepted in the financial services sector, and giving ASIC and APRA joint administration powers over the BEAR.
In addition, a further three recommendations required reviews before they could proceed, including establishing a working group to monitor the mortgage broker remuneration model, reviewing the quality of advice, and assessing whether commissions exemptions for the sale of general insurance policies needed to be removed.
The whole problem will eventually become so intolerable that the Future Fund will be part of the solution. (Pollies can’t wait).
So, the question in that case, was the Royal Commission’s role to create failure by design?
As for the banks, they left wealth management to focus on lending. The RBA has kept things floating just fine. At some point, blockchain will be mandated. Some banks will be prepared, some will not. The tech giants will be ready to burst that cozy bubble.
We need Royal Commission on the Royal Commission.
The industry needed the Royal Commission and its recommendations to help it manage itself and to increase its credibility. There is nothing in the recommendations that any quality adviser, advice business or licensee shouldn’t have been doing anyway.
As with any big change in any industry the good get better and the average either just grizzle and hope change will go away or drop off the side of the plate.
Yep, 100% correct. Everyone voting it down shows how many poor and lazy people in the industry. Well said mate.
Lazy? What on earth do you think about Intra Fund Advice? Professional?
You missed some items:
– Life insurance premiums have skyrocketed, damaging the hip pocket of consumers or causing them to cancel the cover and lose vital protection
– Consumers can’t access financial advice unless they pay through the nose
– Those who can’t access financial advice are resorting to sales-driven activities of super funds with less consumer protections, or getting sucked in by unlicensed operators and fraudsters.
– The life insurance industry is the brink of collapse
– Thousands of jobs have been lost forever. Not just financial advisers, but ancillary staff and those who service the industry.
Kenneth Hayne spent far too much time pontificating with executives and bureaucrats far removed from consumers, and didn’t bother speaking to financial planners on the ground, who could have given him a great deal of help to uncover the real problems in the financial sector.
Very true, though more than half the insurance problems are self-inflicted by the insurance companies. The Royal Commission just provided the gentle push over the edge.
Well said.
I didn’t notice that the glass was half full
There are some crazy demands from that old man who knew they would all be implemented, including this doozy:
“including bringing mortgage brokers under the same licensing requirements as advisers”
His adviser demands were designed to get advisers out of business except for the wealthy. Why do that to mortgage brokers?
They really should have appointed three commissioners. One commissioner can get a very high sense of their competence.
1) Massive increase in FUM for Industry Super – check
2) Industry Super Competition eliminated – Banks Check – AMP – Almost.
3) Non Industry Super Advice providers reduction – check.
4) Non Industry Super Advice providers cost on their business program – check with ASIC, TPB, Education costs etc
5) Non Industry Super Advice “Cover In Red Tape” Program – Check and ongoing. Many programs running at the same time. very successful and ongoing.
6) Non Industry Super Advice – remaining to be limited to fewer and fewer clients to allow Industry Super to increase market share – check.
7) Increase Intra Fund Advice – in progress – wait for it.
Well done Liberals.
Thanks Scott Morrison – Industry Super may well consider you for their Hall of Fame at some point in the future. Certainly worthy.
It was completely bipartisan as many of the weirdest laws.
Otherwise, I agree, a stellar report card to make advice inaccessible. What is the purpose? impoverishing all Australians?