Still no exit strategy in sight for bank deposit guarantee
|
The Federal Government is yet to indicate how it is going to manage an exit strategy from the bank deposit guarantee, leaving the financial services industry with a considerable unknown, according to the deputy chief executive officer of the Investment and Financial Services Association (IFSA), John O’Shaughnessy.
O’Shaughnessy told a Pensions and Investments Summit on the Gold Coast that he believed it was possible that the Government would opt to leave the guarantee in place in some form, but it was a question of what it would then look like.
His comments came in circumstances where a number of mortgage funds remained frozen, but O’Shaughnessy said he believed the Government’s decision to implement the guarantee had been correct given the circumstances at the time and notwithstanding the market distortions it had then created.
He said there was a danger the financial services industry would be confronted by significant regulatory change flowing from the global financial crisis and from that change would flow higher compliance costs.
However, O’Shaughnessy warned that the Government needed to look at its own specific set of circumstances and its own regulatory system.
“We need to look at fixing what is broken and not follow what is happening overseas,” he said. “Nor should we lose sight of the value of competition.”
Recommended for you
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.