Bank dominance not an issue - Deloitte
Despite all the discussion of the perils of vertical integration and undue bank dominance in the Australian financial services industry, major consulting firm Deloitte is arguing Australia's financial system is not concentrated to a degree that would indicate problems.
The consulting firm has used its second submission to the Financial Systems Inquiry to argue that there is no concentration which would cause problems for competition whether by sector (banking, insurance and wealth management) or overall.
Further, it has cited the methodologies used by the Australian Competition and Consumer Commission (ACCC), the Herfindahl-Hirschman Index (HHI), to suggest the main retail banking product markets in Australia are below the threshold level of 2000 that would signal further investigation is warranted.
"Indeed, if anything, parts of the system including superannuation may be too fragmented and some consolidation — while not an easy task — may be beneficial in creating a more efficient sector and reducing costs for consumers," the submission said.
"Similarly, many consumers benefit from the convenience and efficiencies inherent in solely or predominantly using an individual financial institution," it said. "The trend towards vertically-integrated suites of services is a reflection of both the benefits that many consumers derive from managing fewer financial relationships and economies of scale and scope for providers."
The submission said it was a reflection of a market in which competition was working effectively.
Recommended for you
Shadow financial services minister, Luke Howarth, has stressed the Coalition’s commitment to reforming the CSLR, adding that he ultimately wants to “get rid of it”.
With just over three weeks until the federal election, the FAAA has put a reduction in red tape and further support for new entrants on its priority list for an incoming government.
The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered.
Rather than taking a controlling approach, the latest generation of overseas private equity deals is helping advice firms to achieve their growth ambitions, three commentators have said.
