Ramsay Review interim report confirms urgent need for a superannuation code of practice
7 December 2016
Recommendations from a key Treasury review into the financial sector’s dispute resolution framework have again confirmed the urgent need for the industry to implement a genuine and binding superannuation code of practice, Maurice Blackburn Lawyers said today.
Maurice Blackburn Principal Kim Shaw said the interim report of the External Dispute Resolution Review, released this week, had made clear that a code of practice was key to lifting both the standards of practice within the industry, as well as helping to improve consumer confidence.
“An enforceable code of practice is something we have long called for as an urgent priority to help best regulate the conduct of the insurance and superannuation industries,” Ms Shaw said.
“We would urge the Federal Government to ensure such a code is put in place as soon as possible, and it is crucial that this is developed through an open process that includes genuine consultation with community representatives and industry groups.
“There have been attempts by some in the industry to previously introduce self-regulated codes, but in our view these have been woefully inadequate and have not gone far enough in ensuring genuine improvements to group insurance standards.
“As this week’s interim report notes however, efforts are now at last underway across the peak superannuation bodies for the development of a genuine, binding code of practice, and we support the continuation of these efforts,” she said.
Ms Shaw also welcomed the report’s recommendation of an industry-funded compensation scheme of last resort.
“We know that recoverability for claimants remains a key issue, particularly for those who have suffered because of poor financial advice provided by advisors who have become bankrupt or cannot meet their obligations to compensate,” Ms Shaw said.
“A scheme of last resort is a critical measure that will not only help to ensure these people no longer miss out on the compensation they deserve, it will also be a further mechanism to hold the industry responsible for poor advice that will lead to a better standard for the future.
“We urge the Federal Government in acting on this recommendation to ensure that any such scheme is implemented retrospectively, as this is vital in ensuring that people who fell victim to poor financial advice as a consequence of the global financial crisis are also appropriately compensated,” she said.
A copy of Maurice Blackburn’s submission to the Review of the Financial System External Dispute Resolution Framework is available here.