{"id":28760,"date":"2015-02-24T15:44:08","date_gmt":"2015-02-24T04:44:08","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=28760"},"modified":"2025-02-25T09:18:07","modified_gmt":"2025-02-24T22:18:07","slug":"fofa-style-regulations-needed-for-insurance-sector","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2015\/02\/24\/fofa-style-regulations-needed-for-insurance-sector\/","title":{"rendered":"FoFA-Style Regulations Needed for Insurance Sector"},"content":{"rendered":"

Greens Senator Peter Whish-Wilson<\/strong> has called for mandatory \u2018FoFA-style\u2019 regulations to tackle the conflicts of interest within the insurance industry.<\/span><\/p>\n

<\/p>\n

Responding to reports in Fairfax Media that NAB Wealth had \u2018covered up\u2019 a number of issues within its financial advice arm, including inappropriate insurance switching advice, Senator Whish-Wilson said the Government needed to act immediately.<\/p>\n

He said the next most important step in reforming the advice sector was to introduce mandatory regulations, similar to those imposed by the Future of Financial Advice regime, to address the issues identified in the recent Australian Securities and Investments Commission (ASIC) report into retail life insurance advice.<\/p>\n

\u201cThe Government needs to act immediately to address cultural problems in the big banks and look at what they can do to rein in the conflict of interest problems inherent with the vertically integrated, commission-driven model,\u201d Senator Whish-Wilson said.<\/p>\n

\"Senator<\/a>
Senator Peter Whish-Wilson<\/figcaption><\/figure>\n

He argued that the Coalition Government\u2019s failure to act was eroding community trust and would hit small financial advice businesses the hardest.<\/p>\n

I have met dozens of independent financial advisers whose reputation has been unfairly damaged…<\/p>\n

\u201cI have met dozens of independent financial advisers whose reputation has been unfairly damaged by the Abbott Government\u2019s inability to reign in the systematic problems within the big players in the sector.<\/p>\n

\u201cThe Government sought to deregulate the financial advice sector, and then they cut the budget of ASIC and weakened their ability to investigate fraud. It is time that the Government took some strong action and stood on the side of consumers and small businesses in the financial services sector,\u201d he said.<\/p>\n

Meanwhile, Shadow Treasurer, Chris Bowen<\/strong>, said there was a case for further inquiries into financial advice, but was not interested in \u2018publicly belting\u2019 the NAB for its mistakes.<\/p>\n

\u201cI think in these instances good discussions between the banks and the political parties is warranted\u2026 I\u2019d rather be working with them to get good results for Australian financial consumers.\u201d<\/p>\n

He said that only the Government could call a Royal Commission, but that if it were to occur his party would work with the inquiry.<\/p>\n

In contrast, Senator Whish-Wilson said there was now an urgency to establish a Royal Commission into white collar crime and cultural problems in the big end of the financial advice sector, especially around vertically integrated companies.<\/p>\n

For more on the NAB advice scandal, see:<\/p>\n