CHOICE has welcomed the interim report from the Financial System Inquiry as a great starting point for further reform.
The report includes a strong focus on consumer protections relating to excessive credit card surcharges, disclosure statements on financial products and services, and consumer protection regulations more generally.
The report also says that the ability of consumers to get financial advice that meets their needs is being undermined by conflicted remuneration structures, such as bonuses and other payments to financial advisers.
This is in contrast to the government’s winding back of the Future of Financial Advice reforms which CHOICE believes will increase, not decrease, the conflicted remunerations allowed in the industry.
Another strong theme in the report is that the MySuper reforms should run their course. This comes after the Treasury submission to the inquiry argued that Australian superannuation funds were among the most expensive in the OECD.
CHOICE has previously reported that consumers could be paying as little as $300 or as much as $1245 in annual superannuation fees, depending on their account.
Banking competition finding rejected
But CHOICE has rejected the report’s assertion that there is enough competition in banking.
Some 80% of Australians are with one of the big four banks, despite the fact that they have significantly lower levels of customer satisfaction.
CHOICE believes that the big four have a protected status and that they need to be exposed to the full effects of competition. A survey included in CHOICE’s submission to the inquiry found that 58% of respondents agreed with the view there was a lack of competition in the services and offerings provided to them by the banking sector.