The recommendations from the Hayne Royal Commission into Financial Services have been handed down.
On Monday, the Government released the final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The 951 page report summarises the issues and recommendations from the seven rounds of hearings which covered consumer lending, financial advice, lending to small and medium enterprises, issues affecting Australians in remote and regional communities, superannuation, insurance and causes of misconduct in financial services.
The Report is comprehensive and recommendations and implications are being worked through by the industry.
If you would like to read the report (it is in everyday language), then click on this link.
My personal view after reading the final report is that an overarching principal of the document is that financial services, whether the service relates to insurance, financial advice, or home loans, the focus for the future will be one driven by ‘relationships’.
Recommendations such as no cold calling for super funds, insurance, etc as well as proposals to change remuneration appear to boil down to a common thread of one-on-one relationships required between the client and the professional.
How that impacts the cost of advice for the future only time will answer, hopefully technological efficiency can achieve cost compression that benefits us all.
What happens next?
The Government has indicated that it will take action on the Commissioner’s recommendations.
For the recommended changes to take effect, it is up to the Government to implement regulatory changes and pass legislative changes through the parliament.
Therefore, the recommended changes and reforms are unlikely to take immediate effect and many pertaining to personal financial advice and personal insurance are from July 2020 onwards.
In coming months, there will also be a Federal election. This is likely to see both parties offer their own insights as to how they intend to deal with each recommendation.
In the meantime, as always, our focus is aimed at building a better retirement advice service for you. Should any changes be implemented that effect our service provision to you, we will touch base and discuss it with you directly.