Speaking to media from the Association of Financial Advisers conference in Cairns yesterday, Mr Bowen stopped short of endorsing the FSC’s recent proposal, but indicated the federal opposition is watching the issue closely.
“I thought it was interesting that the peak body of the financial services industry said there is not enough regulation – it underlines why the government is going the wrong way,” Mr Bowen said.
“In terms of the details of the proposal, that’s something that we could talk about in consultations, but it’s a very interesting development from the FSC to fundamentally undermine the government,” he said.
More broadly, the shadow treasurer said that while “self-regulation is always better if it can achieve a result”, the case for government intervention in financial services – particularly to address issues of financial advice “market failure” – has been “well and truly made”, thereby echoing FSC chief executive John Brogden’s assessment that “self-regulation [of financial services] has failed”.
The MP for McMahon also reiterated that Labor will take a “robust” financial services policy to the next election and will embark on further consultations with industry, consumer protection advocates and other stakeholders should the government’s “repeal” of FOFA ultimately be successful.
Describing ASIC’s report into the life insurance advice industry as “deeply concerning”, Mr Bowen also refused to rule out a ban on risk commissions, claiming it is an issue it would re-open for consultation.
“The previous government did exempt life insurance from the FOFA reforms because we were concerned about the levels of under-insurance in Australia; that’s a legitimate concern,” he said.
“We are committed to FOFA – in the lead-up to the next election we will continue to consult with the sector in terms of the policy details – but we will be looking at the coverage of FOFA and within that we will be looking at the [ASIC risk advice] report.”
The FSC outlined its proposal for a statutory Advice Competency Standards Board in its submission to the parliamentary joint committee inquiry into ethical and education standards in financial services last month.
