KEY FINDINGS OF REPORT INTO THE FINANCIAL SYSTEM
* Big banks and financial institutions have opaque pricing, conflicted advice and remuneration arrangements.
* Public policy and regulations support the biggest players over rest of the market
* Lack of easily-accessible information, inducing unaware customers to maintain loyalty to unsuitable products.
* Mortgage brokers have become part of the banking establishment, with fees and trail commissions of no benefit to customers and industry riddled with conflicts of interest.
* In general insurance, there are many brands but far fewer actual insurers, poor quality information provided to consumers, and dodgy practices adopted by some sellers of add-on insurance products.
THE TO-DO LIST:
* Ban trail commissions and ensure all brokers, advisers and lenders who deliver home loans to customers have a clear, legally-backed best interest obligation to their clients.
* Treasury working group should examine a deferred sales model to all sales of add-on insurance.
* All banks to have a Principal Integrity Officer obliged by law to report directly to their board and report independently to ASIC if necessary.
* Greater competition and flexibility in the payments system.
* Greater role for the ACCC in promoting competition in the financial sector.
(Source: Productivity Commission report)