Licensees, not planners face RC-imposed changes
Licensees rather than financial planners are likely to face the greatest changes resulting from the interim findings and recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services sector due to be presented to the Government today.
While the Royal Commission hearings have traversed many of the past scandals affecting the financial planning industry, the interim findings and recommendations are expected to mostly point to the licensee shortcomings which led to fee for no service and attempts to retain grandfathered commission status under the Future of Financial Advice laws.
On the life insurance front, it is the insurers rather than life/risk advisers who face most significant likelihood of imposed change with a large question-mark hanging over the future of direct insurance sales, particularly models heavily reliant on outgoing call centres.
Where superannuation is concerned, the major banks and AMP Limited may also find themselves needing to restructure their operations to more clearly define the independence and autonomy of their superannuation businesses with respect to service provision around administration and group life insurance.
While the financial services regulators, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) are expected to face criticism in the findings, the Government initiated legislative changes to their powers and operations.
When the Commissioner, Kenneth Hayne, presents the preliminary findings to the Treasurer, Josh Frydenberg, he is expected to indicate whether he believes an extension of the Royal Commission is necessary.
Frydenberg reiterated this week that if Hayne sought an extension of the Royal Commission then it would be granted.
The Royal Commission has scheduled hearings around policy issues in November.
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