The financial services industry has breathed a sigh of relief with the election result finally decided yesterday.

It has escaped the prospect of a royal commission on banking, which would have sucked in the life insurance industry and financial advice.

This has been in Labor’s sights, under a long-running battle against the financial advice industry.

But if the life insurance industry and financial advisers think all their problems will end with a Coalition win, they need to change their outlook.

Firstly, the composition of the Senate is no better than in the previous Parliament – in some ways it is worse.

The Life Insurance Framework bill will return to face an unknown upper house in terms of support.

Labor says it is not happy with the bill proposed in the previous Parliament, arguing against the level of commissions and saying clawbacks are not strong enough.

Nick Xenophon’s party, which has campaigned for more corporate accountability, would probably support a tougher framework.

“Corporations must accept the social contract they have with the community,” the Nick Xenophon Team’s manifesto said. “We want transparency and accountability in all walks of life.”

Which raises the question: will the Coalition Government have the stomach to fight for the bill proposed in the last Parliament?

A lot will depend on the Assistant Treasurer, and there is no guarantee Kelly O’Dwyer will remain in the role.

The bill is probably not a high priority for the new Government, and may not be introduced into Parliament this year. It is assumed Parliament will sit again before September, and budget measures from earlier this year will be a priority.

Assuming the bill passes with little opposition, one would expect the framework to take effect on July 1 next year, with the Australian Securities and Investments Commission review of the life industry pushed out by one year.

There’s one thing of which advisers can be certain: a Life Insurance Framework bill will be passed by this Parliament in some form.

The other piece of looming legislation for advisers is the education and professional standards reform. This seems to have bilateral support and should pass both houses without too much opposition.

Again, its passage will be dependent on the Government’s business timetable, but if it is not contentious it might be sooner rather than later.

When the last Parliament was dissolved the Senate Economics Committee was holding an inquiry into financial advice, with an additional focus on the life industry.

Submissions had been made to the latter part of the inquiry.

It is hard to see why this inquiry should not be resurrected, and the committee’s membership will not be too different.

The life industry can expect to come under scrutiny, with some explosive public hearings.

It will be interesting to see if the committee calls for superannnuation fund trustees to appear, because they have an integral role in deciding group life claims.

Meanwhile, the financial services industry’s lobbyists say they hope the close election will result in politicians putting the nation’s interests first, especially with the Life Insurance Framework.

“Australians are looking for a clear vision of the future, well-considered policy and strong leadership,” Association of Financial Advisers CEO Brad Fox said.

“The constituents of the financial advice sector share this view.”         

The trouble is, politicians may not share the industry’s view on what constitutes “well-considered policy”.

– John Wilkinson