At the FSC Leaders Summit in Melbourne yesterday, FSC chief executive Sally Loane unveiled new research by Tria Partners – commissioned by the FSC – that shows ongoing regulatory reform in the past five years has cost the financial services sector $2.75 billion.
It has also added $105 to the cost of superannuation for individual Australian consumers, while once reforms currently before Parliament are implemented, the cost to the industry will rise to $3 billion.
“The transactional cost of political change and constant industry review, re-review and reform in a sector that offers so much potential for immediate further growth – for consumers and for the economy – has been enormous,” Ms Loane said.
She urged the government to “stop kicking the can down the road” and pass legislation already in the pipeline, including the Life Insurance Framework.
“Regulatory reforms to the financial services industry have been necessary to address structural issues and improve consumer outcomes,” she said.
“We need to pass the life insurance reform laws. Every day we fail to pass this legislation is another day with inappropriate incentives in the market. There is bipartisan support for these measures, so they should be swiftly implemented.”
Both the FSC and Ms Loane have been criticised by the Life Insurance Customer Group (LICG) recently, which says the FSC’s recommendations are not based on facts and disregard the interests of consumers.
“The FSC claims to represent the interests of consumers, however [it has] failed to provide any evidence, reason or data on which to base their reform’ recommendations,” an LICG spokesperson told ifa.
“They continue to make recommendations for things with what would appear to only be the good of their members in mind, certainly not consumers. They seem to be able to get away with not answering questions raised of them, especially when asked to articulate consumer benefits.”
This FSC cartel mob really have no scruples. They refuse to publicly state what the benefits to the end consumer will be with the LIF because there are none.
They use research data to show costs to the financial services sector without pointing out that it will be the risk advisers and end customers who suffer with increased profits to the members of the FSC. And fail to mention record profits by the FSC members!
If the LIF goes through in its current form and the under-insurance issue worsens in the future (which it will), Sally Loane should be held personally responsible.
The LICG have the same number of sign ups as the membership of the AFA. All in disagreement with the current LIF. The AFA are questioning the direct carve outs trying to be sneaked in by the FSC. So no, you do not have bipartisan agreement Sally!
You have been asked the questions Sally. Why don’t you answer them??
the cost to industry will be Billions as the turn over of the Insurers dries up from no business coming in and also the loss to the economy will be billions to the government because the industry will be turning over under 10 Billion from $16 Billion a year when our commissions are reduced and that will have an impact on the governments revenue.
The only cost will be to Government if it implements this FSC cartel white wash on the Australian people, wake up Canberra especially Kelly Odwyer we pray you are aware of the lobby group who is your Bestie at the moment the FSC.