The end of conservative rule and subsequent election of a Kevin Rudd-led Labor Government is expected to usher in a new era in financial services reform.

Following Labor’s landslide election victory on Saturday, the financial services sector is bracing itself for change, with ALP financial services spokesman Nick Sherry expected to reveal a review and reform agenda in the coming weeks.

While ministry portfolio positions won’t be finalised until Thursday, Senator Sherry has previously outlined his vision for sector reform, starting with amalgamating the two industry regulators and a rationalisation of external dispute resolution schemes.

He and incoming Federal Treasurer Wayne Swan have also indicated further changes to the disclosure regime, paring financial services guides and statements of advice to the bone from 50-page manuals to documents numbering just three pages.

Senator Sherry has also pledged to examine the concept of a “safety net” for insurance and banking customers as recommended by the Council of Financial Regulators in 2005.

On the issues of director offshore foreign insurers and discretionary mutual funds, he has pledged to consult the Australian Prudential Regulation Authority (APRA) before stating his position.

Interestingly, APRA and the Australian Securities and Investments Commission (ASIC) – the so-called “twin peaks” of financial services regulation – may be merged by the new Government as it searches for savings. Prime Minister-elect Kevin Rudd also stated during the election campaign that ASIC’s budget is likely to be trimmed.

Importantly for the insurance sector, Senator Sherry – should he retain his portfolio – has expressed his willingness to work hand-in-hand with the industry.

National Insurance Brokers Association CEO Noel Pettersen says he already has a working relationship with Senator Sherry.

“There will be changes in regulations as a result of the change in government,” Mr Pettersen said. “Just how significant, and the speed of the change, is not known at this stage. But clearly there will be some change.”

Financial services bodies have stated their desire to work constructively with the new Rudd Government.

Investment and Financial Services Association CEO Richard Gilbert says Labor commitments to boost financial service exports, reduce withholding tax and review the managed investment tax regime are welcome initiatives.

Financial Planning Association CEO Jo-Anne Bloch says Labor’s plans to cut red tape will reduce the cost of financial advice.