The recent announcement by the Financial Services Council (FSC) that it would not be pursuing a three-year responsibility period is a "bitter sweet" victory at best, Asteron Life executive general manager Jordan Hawke has claimed.
Speaking at a recent Asteron Life adviser roadshow, Mr Hawke said he wasn't going to agree or disagree with the FSC proposal, but was deeply disappointed the industry had shown it was not capable of self-regulation.
The proposal came about because Financial Services Minister Bill Shorten had suggested putting in place a 20 per cent commission rate across the board. Because the industry objected, Mr Shorten gave the industry the opportunity to self-regulate, Mr Hawke said.
The FSC went to the market and came up with two proposals and "in the ensuing months, I saw an industry that just threw rocks at each other", which highlighted how immature we are as an industry when it comes to the challenge of self-regulation, he said.
The Council has abandoned the policy because the industry cannot agree and although some advisers view it as a victory, it's bitter sweet because it has shown the regulators that the industry can't self-regulate, he added.
"The regulators have now said to us: 'You've had your opportunity and now we're taking it back.' That to me is one of the most burning platforms that we face as an industry."
If the industry learns anything from this, it's that it needs to work collectively, Mr Hawke said.
"We need to be aligned in the challenges that this industry faces rather than working in silos. I look at us as a manufacturer and we have to grow up as well. As an industry, we all spend the whole time eating our own. We develop products - best definition, cheapest premium, best commission terms - just to rip business out of each other."
This is "ridiculous and unsustainable", he added.
Mr Hawke said he supported regulation but that over the past 12 to 24 months the industry had been subjected to overregulation. This was being driven by consumers having a lack of trust in the industry, he said.
It adds a significant layer of cost to business, which will end up getting passed back to the person it was designed to protect - the consumer.
Mr Hawke also said he believed the industry was not financially or structurally secure for the future: "I don't believe we've evolved to take account of the times we're in. It's one of the biggest issues we face," he said. "It's important that we learn from the past."
