Labor supports the implementation of recommendation 2.10 of the Banking Royal Commission.
The Morrison Government has been too slow to implement the recommendations made in that important inquiry. This legislation has been introduced more than two years after Commissioner Hayne handed over his final report, which identified glaring failures of the regulatory system surrounding financial services. Misconduct by Australia’s large banks and financial service providers cost customers millions and has caused immeasurable harm.
This failure to introduce legislation on this important matter in a timely manner is another Coalition failure in the financial advice sector. The sector has already incurred significant costs attempting to implement the government’s previous reform agenda—the implementation of code-monitoring bodies. Peak bodies spent hundreds of thousands of dollars working to establish code-monitoring bodies, which ultimately went to waste as the government decided to take a different approach.
Financial advisers have also suffered deep uncertainty through the failed implementation of the Financial Adviser Standards and Ethics Authority (FASEA) standards. The independent standards setting body—which was meant to deliver certainty for the sector—failed in every respect. Three Chief Executive Officers (CEOs) were appointed in the body's first eighteen months of operation. Standards were issued mere days before they were due to come into effect. Advisers were forced to suffer uncertainty in relation to exams and qualification requirements for months or even years.
Given these failures, Labor strongly supports the Chairs’ recommendation for a review of the legislation and its impact after two years.
Labor Senators also encourage the government to strongly consider the view of consumer advocates, and consider appointing representatives with appropriate consumer experience and sectoral knowledge to the Financial Services and Credit Panel.