The reforms that were introduced Thursday, 12 November, have addressed 20 of the 76 recommendations from the Hayne royal commission, as well as one additional recommendation from the government.

The reforms have included tougher anti-hawking provisions for superannuation and insurance products to prevent pressure selling, prohibiting superannuation trustees from having a duty to act in the interests of a person other than those arising from their duties as a trustee and allowing provisions in financial services industry codes to be enforceable.

Super Consumers Australia has welcomed the introduction, stating it will strengthen the arm of regulators and allow them to protect individual members who had their retirement savings jeopardised by the miscount of super funds.

“The cost of being sold into a poor quality super fund can mean the difference between a comfortable retirement or struggling to pay the heating bill,” said Xavier O’Halloran, director of Super Consumers Australia. 

“We’re especially pleased that the new legislation makes it crystal clear that it’s illegal to hawk a member of a MySuper product into a choice product offered by the same fund. The complementary reforms announced in the federal budget to end the creation of duplicate accounts make it even more important that people end up in a single quality fund and are not sold a lemon,” Mr  O’Halloran said.

The legislation will also include breaches of industry codes that could now attract civil penalties – with the government targeting better adherence to the standards and certainty for consumers.

The government has promised to provide further clarity on the role of the regulators, as well as enhance the requirements of reporting breaches from financial institutions, with the intention being to report and investigate significant misconduct sooner.

The package also included a deferred sales model for add-on insurance products, to promote informed purchasing decisions and prevent inappropriate sales, as well as defining the handling and settlement of insurance claims as a “financial service”, which will require insurers to comply with other licensing obligations. Insurers will also be expected to act honestly, efficiently and fairly under the law. 

Australian Banking Association (ABA) chief executive Anna Bligh reported the industry is ready for the next round of the royal commission reforms, to come into effect from next year.

According to the body, the banks have fully implemented five of the eight Hayne recommendations, which were directed at the industry to adopt, with progress being made on the remaining three. 

Almost half (31) of the recommendations were relevant to banks, with 37 of the total 76 to be implemented by government and regulators. 

“Banks have been partnering with the government during the pandemic to support customers and the economy and look forward to continuing that engagement as the royal commission legislation is considered,” Ms Bligh said.

A statement from Treasurer Josh Frydenberg said the government is focused on completing the implementation of the remaining Hayne commission recommendations, consistent with its updated roadmap following the onset of COVID.

About the author

Sarah Simpkins and Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Sarah Simpkins and Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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