The Financial Services Council says the cost of ongoing reviews and delayed action on financial services legislation reform has cost the Australian finance industry in excess of $2 billion.
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.”
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