Good start to better financial outcomes

COTA chief executive, Ian Yates, highlights the focus on improving the superannuation and retirement income system, and says recommendations for better regulation of financial products and advice were particularly beneficial.

“COTA urges the federal government to adopt the recommendations of the Financial Systems Inquiry and take strong action for a more equitable and sustainable financial system in which consumers can have full confidence,” Mr Yates says.

“We accept there may be scope to streamline the regulation of the financial system, but never at the expense of the best interests of consumers, including vulnerable groups such as older Australians and the less financially literate,” he says.

The commitment to build a broad consensus around the objectives of Australia's superannuation and retirement income system offers, according to Mr Yates, a “once in a generation” chance to deal with the challenges of providing support for older Australians as the population ages.

“However, it will fail to deliver on this vital promise if the adequacy and fairness of the retirement income system is not included in the scope of reform. The Inquiry recognises this was largely outside its terms of reference but does call for fairer taxation of superannuation contributions to be addressed,” he says.

Australia urgently needs the comprehensive, independent review into retirement incomes COTA has been calling for, to inform sustainable future policy settings for decades to come.

“The Inquiry calls for further separation of incentives for financial advisers to recommend certain financial products from their ability to give transparent advice in the best interests of the client.

“The development of a more professional financial advice industry and training is part of the solution; strong regulation that protects consumers' interest is another essential element.”

COTA supports the call for the Australian Securities and Investments Commission (ASIC) to have the power of intervention in products that by their very design cannot be in the best interest of consumers.

“COTA looks forward to working with the federal government and other industry stakeholders in the robust discussions needed to implement these recommendations and improve the financial advice, superannuation and retirement income system in Australia so that it is unequivocally focused on the interests of consumers,” Mr Yates says.