Australia’s financial services sector is unlikely to adopt the United Kingdom’s Treating Your Customers Fairly (TCF) campaign despite calls to do so, FPA chief Jo-Anne Bloch has said.
“The Treating Your Customers Fairly campaign was costly, took years to implement, and is very rarely mentioned anymore,” Bloch said.
“I’m not sure it’s been as successful, as indicated, in changing behaviour. If it was, why would the Retail Distribution Review have been launched?”
Bloch’s comments come after Praemium group managing director Arthur Naoumidis said he feared the UK would leapfrog Australia in protecting investors and their retirement future, and adopting the UK’s TCF would be a potential solution.
“Recent regulatory changes in the UK have left Australia behind, with the result that local investors now have a less favourable protection environment,” Naoumidis said.
He said the recently completed UK Retail Distribution Review (RDR) meant the UK had advanced Australia in banning commissions to financial advisers from the end of 2012 and the introduction of TCF meant a fair service is delivered to consumers, a move Naoumidis hoped Australia would adopt.
“The UK’s regulatory system has always been half a step ahead of Australia, except in the pensions area where it’s well behind. That said, not all policies or recommendations from the UK should be adopted automatically,” Bloch said.
“The UK market has some differences from Australia such as size, less concentration of providers and more complexity. The RDR report mentioned by Mr Naoumidis is still in consultation phase and is far from being legislated.
“The FPA has been in regular contact with our UK colleagues on the issues raised and would support many as highlighted in the RDR of December 2009. These include moving away from commissions, and an accredited professional body.”
Praemium services the UK financial services sector through its SMARTfund and Discretionary Platform Service.
