What progress has been made since the royal commission?

The data came in response to a question on notice from Greens senator Nick McKim around the status of the government’s response to each of the recommendations from the royal commission.

The update noted that of the 40 recommendations from Kenneth Hayne’s final report delivered in early 2019, 26 had so far been completed.

These included:

- Introducing a best interests duty for mortgage brokers.

- The introduction of annual renewals for advice fees.

- Disclosing to advice clients when their adviser did not meet the legal definition of “independent”.

- Removal of pre-FOFA grandfathered commissions for advisers.

- Prohibition of advice fee deduction from choice super accounts unless annual renewal requirements are met.

- Prohibition of super funds incentivising employers to select funds as a default.

- Introducing civil penalties for breach of trustee covenants.

- Including funeral insurance in ASIC’s financial product regime.

- Application of unfair contract terms to insurance contracts.

- Subjecting ASIC and APRA to regular capability reviews.

Treasury noted that a further 11 recommendations were at the consultation stage, including bringing mortgage brokers under the same licensing requirements as advisers, enacting a national scheme of farm debt mediation, extending the BEAR regime to all super licensees, APRA-regulated institutions and insurers, and establishing a compensation scheme of last resort.

Other recommendations in the consultation stage were those around eliminating exceptions to financial services laws, identifying the fundamental norms of behaviour accepted in the financial services sector, and giving ASIC and APRA joint administration powers over the BEAR.

In addition, a further three recommendations required reviews before they could proceed, including establishing a working group to monitor the mortgage broker remuneration model, reviewing the quality of advice, and assessing whether commissions exemptions for the sale of general insurance policies needed to be removed.