A new Trustmark standard is to be introduced next year for financial products and services, intended to act as a quality indicator for consumers.
This initiative has been created by the Financial Services Council (previously IFSA), and was announced to delegates last week at the Councils’ annual Conference in Melbourne.
The FSC Trustmark is to be applied to a range of qualifying financial products and services across:
- Life Insurance
- Superannuation
- Investments
FSC CEO, John Brogden, likened the intended use of the Trustmark by consumers to that of the National Heart Foundation Tick for healthy foods, where the equivalent FSC Trustmark will help Australians identify quality financial products and services that meet the standards required by the Council.
Life companies and fund managers wanting to utilise the Trustmark will be required to observe the relevant components of the 16 quality standards administered by the FSC, including those that relate to fee strudctures and product commissions. The 16 standards are:
- Code of Ethics, Code of Conduct
- Equity Trusts
- Operational Capability Standard
- Product Performance: Calculation of Returns
- References to the FSC Logo
- Scheme Pricing
- Valuation of Scheme Assets and Liabilities
- Presentation of Past Performance Information and Visual Promotions
- Genetic Testing Policy
- Proxy Voting
- Alternative Forms of Remuneration
- Rebates & Related Payments
- Family Medical History Policy
- Incorrect Pricing of Scheme Units – Correction and Compensation
- Best Practice Guidance for Disclosure in the Mortgage Trust Sector
- Adviser fees in Superannuation
The FSC says it has initiated the Trustmark “… in the wake of a string of financial disasters that have hit thousands of Australian families over the past two years.”
Mr Brogden commented, “Thousands of mum and dad investors lost their life savings in recent financial collapses such as Storm Financial. This has left many Australians wary of investing and in need of a signpost for financial products and services that are committed to high quality, transparency and bound by high standards.”
The introduction of the Trustmark will… provide Australians with the confidence they need when making financial decisions…
“The introduction of the Trustmark is a positive move to ensure tighter compliance with standards and will provide Australians with the confidence they need when making financial decisions – from the management of their super contributions to the selection of their life insurance provider,” added Mr Brogden.
The FSC says consumers will start to see the new Trustmark from 1 January 2011.
