The financial services sector has undergone sufficient reviews and inquiries to examine its weak points and a Royal Commission into the sector would only derail and delay current reforms stemming from those reviews according to the Chief Executive of the Financial Services Council, Sally Loane.
In a statement published on the FSC’s website and printed in the Australian Financial Review, Loane said the life insurance sector was undergoing its biggest reform in decades with the development of the FSC’s Life Insurance Code of Practice and the pending returning to Parliament of the Life Insurance Framework legislation.
Loane said these two developments were in response to previous reviews of that sector while financial services had been subject to 15 major inquiries over the past decade.
“We need to stop the cycle of endless inquiries and collective amnesia and get on with the job of concluding the reforms recommended by David Murray’s Financial System Inquiry, the various bipartisan Parliamentary reports and the landmark Trowbridge review of life insurance,” Loane stated.
The FSC’s new code “…is the industry’s commitment to strengthen community trust and confidence in life insurance, which is one of the most important financial protections a person can obtain. The code will include timetables for decisions, standard disclosures, medical definitions and a transparent governance regime,” Loane said.
“This package of legislative reforms…represents a much more effective and efficient course of action than an expensive and long-drawn out Royal Commission…”
“In addition, the way advisers are paid for selling life insurance will change if a new bill gets through Parliament. Under the Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016, which will cap upfront commissions to a maximum of 60 per cent of the first year’s premiums as broadly recommended by Trowbridge and Murray, bringing the sector more into line with all other financial advisers who operate under a fee for service model,” Loane added.
Loane stated a 16th review was not necessary and would interfere with these current reforms and in another statement, released for the opening of Federal Parliament, called for that body to introduce and pass the LIF legislation and the legislation to increase standards required of financial advisers.
“The FSC’s Life Insurance Code of Practice is an important piece of self-regulation, and will be strongly complimented by legislative reforms in response to the Financial System Inquiry and Trowbridge Review,” Loane said.
“This package of legislative reforms for financial services was ready to be implemented by the last Parliament, and represents a much more effective and efficient course of action than an expensive and long-drawn out Royal Commission which would only derail reforms already in the pipeline,” Loane stated.
Current Reforms More Useful Than Royal Commission… for the FSC members
Sally Loane, you have no credibility and should be ashamed of yourself.
If you are simply a mouthpiece for your masters, then have some decency and resign.
If you actually believe the rubbish you continually spout, then you are incompetent and should be removed along with your tarnished organisation from any future talks pertaining to the LIF legislation.
The FSC may have something valid to say around the future of Banking and Investment, though they have zero validity around the LIF.
They have proven continually that they are only focused on a course that improves their Business model at the expense of others and the AFA, FPA and LICG need to attack them, not pander to an organisation with little care and less responsibility to the rest of Australia.
Beware the Royal Commission Sally!
If a Royal Commission into banking does surface, there is every chance every adviser will be lining up to make a submission as to the role of the FSC and their corrupt uncompetitive actions taken in the LIF. Don’t kid yourselves that t A Royal Commission wont be looking at Banking behaviour in other sectors such as Life Industry.
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