Finance reform worse for consumers: report
Market watch top headlines
Financial services sector bosses believe regulatory changes in their industry will leave consumers worse off, a new report shows.
Chief executives of 63 financial services firms including fund managers and financial advice providers have called for reduced red tape, reform of the tax system and more workplace flexibility in the latest Financial Services Council-DST Global Solutions CEO Report.
Financial Services Council (FSC) chief executive John Brogden said the industry was concerned particularly that regulatory changes that will affect provision of financial advice and low-cost superannuation options will be too great a burden.
"Policies that impact the productivity of the financial services sector deliver few positive outcomes for consumers," Mr Brogden said.
From July, 2013, the federal government's Future of Financial Advice (FOFA) reforms, which among other changes ban hidden commissions for financial advisers, become mandatory.
The FSC, which represents for-profit superannuation funds and financial advisers, is concerned the new regulations will make financial advice less accessible because customers will have to pay an up-front fee.
"We expect to see a reduction in the number of financial advisers in the marketplace and a reduction in the number of people receiving financial advice because of the cost increase," Mr Brogden said.
The FSC-DST Global survey found a high level of concern among CEOs about the tax system, with more than three quarters of leaders saying the current arrangements were a brake on productivity and nearly all saying it is too complex.
They called for a broadening of the GST and a reduction in income and company taxes as well as a removal of state taxes such as stamp duty.
The survey also revealed that the life insurance sector, which covers income protection insurance, has suffered higher levels of claims and lower profits in recent years because of increasing redundancies.
In other key findings:
* 69 per cent of CEOs said Australia is not prepared for an ageing population;
* 82 per cent said the nation is not prepared for rising health costs;
* 95 per cent said infrastructure planning is not adequate;
* and 75 per cent think the government pension is not sustainable.
Mr Brogden said the outlook was "for a very flat industry" in financial services in the year ahead.
Peter Trute, AAP Senior Finance Writer