Regulatory change was major theme in 2015, as was who was driving – and who was surviving – the changes.
The Life Insurance Framework
From its first release in June, to the recent changes to its start date and clawback provisions, the Life Insurance Framework has occupied the time and energy of many in the financial services and advice sector.
Given the draft legislation was released recently, and comments on it close soon, before a mid-2016 start date, advisers can look forward to hearing plenty more about the framework as it is rolled out and tested over the next few years.
The Trowbridge Report
The seeds for the LIF may have come from Report 413 released by the Australian Securities and Investments Commission in October 2014 but the release of the Trowbridge Report in March of this year prepared the ground for a shift in the debate from quality of advice to adviser remuneration.
Finding little favour with advisers and the Association of Financial Advisers which was part of the working group discussions, the proposed model was not adopted but the debate about what advisers will be paid continues.
Ministerial Merry Go-Round
After having seen Senator Arthur Sinodinos and then Senator Matthias Corman enter and then exit the Assistant Treasurer’s role in 2014 the Government continued the shifts with Josh Frydenberg holding the role from late 2014 to late September 2015. Despite the short stay in the role Frydenberg was in the thick of discussions around the Trowbridge Report and helped formulate the early stages of the LIF changes.
After the change of Prime Minister from Tony Abbott to Malcolm Turnbull, Frydenberg became Minister for Resources, Energy and Northern Australia while Kelly O’Dwyer became both Assistant Treasurer and Minister for Small Business.
In that role O‘Dwyer was present for the Government’s response to the Financial System Inquiry, the release of LIF draft legislation and the release of draft legislation on adviser professional standards and education.
Getting Out of Town
While NAB’s exit from MLC, after a majority sale to Japanese insurer Nippon Life, was not unexpected Suncorp kept its cards much closer to its chest announcing it would move away from maintaining self-employed advisers forcing Guardian Financial Planning and Suncorp Financial Planning advisers to seek new homes.
However, US insurance giant MetLife announced it would return to the Australian market after an absence of more than a decade.
Licensee problems for banks
The problems plaguing the Commonwealth Bank’s advisory groups in recent years began also to appear at a number of other banks with NAB and Macquarie stating some of its previous employees had been shown the door, raising the question whether institutions should be allowed to own and operate financial advice business.
