In a recent speech the Assistant Treasurer discussed four Government priorities for the financial services sector which are likely to feature in its response to the Financial System Inquiry Report: superannuation, professional standards of financial advisers, life insurance and the key outstanding recommendations from the Johnson Report.
APRA, ASIC and the RBA are already implementing changes within their authority.
Superannuation
In June the Government released exposure draft legislation which proposes that all APRA-regulated superannuation funds — including corporate, industry, public sector and retail funds — have trustee boards with at least one-third independent directors and an independent chair.
The Assistant Treasurer commented:
“it has been suggested that the Government wants to end equal representation on trustee boards. This is not the case….The Government is in no way preventing trustees from enshrining equal representation in their constitutions. The draft legislation does not refer to the composition of the remaining two-thirds of board members; leaving capacity for boards to split these directors between member and employer representatives; if they consider this to be appropriate.”
Other issues the government is still considering in this sector include:
- disclosure models for super funds;
- the process by which default funds are selected;
- that trustees facilitate the provision to retirees of ‘Comprehensive Income Products for Retirement’.
Life insurance
The Government is considering the retail life insurance industry reform package which includes changes to upfront commissions, measures to reduce inappropriate policy replacement, and elements to enhance the quality of advice and improve industry efficiency.
