Parliamentary Secretary to the Treasurer Chris Pearce is a man of his word. Shortly being put in the job last October, he surprised the industry by indicating his willingness to listen to the multitude of gripes over the Financial Services Reform Act (FSRA) and act on them.

Yesterday he released a package of 25 proposed refinements to the FSRA that have been greeted with considerable enthusiasm by the major industry groups (see following story).

Mr Pearce says the refinements, which have been developed in conjunction with the Australian Securities and Investments Commission (ASIC), “will give industry participants greater confidence to make use of the increased flexibility that is inherent in the FSR framework”.

Most of the problems identified by brokers – whose views have been strongly promoted by NIBA – appear to have been addressed.

Although National Insurance Brokers Association CEO Noel Pettersen voices the caution of many associations when he warned yesterday that “the devil may be in the detail”, Mr Pearce has made it plain he wants to cut paperwork and remove compliance rules which do little to increase consumer transparency.

“By way of example, financial services licensees will be given more scope to tailor disclosure documents to different types of clients or products,” he said. “Disclosure is most effective in protecting consumers when the information received by consumers is concise and relevant to their needs.”

Mr Pearce says the intention of the refinements include to “ensure that consumers receive information that is relevant to their needs; reduce the compliance burden on industry; and clarify the intent of the legislative and regulatory framework that applies to the financial services industry”.

Other issues addressed by the proposed refinements include the distinction between retail and wholesale clients; the provisions of secondary services; the definition of general advice; jurisdictional issues; issues surrounding authorised representatives; staff training; and non-cash payment facilities.

The proposals are intended to:

• Facilitate the provision of more concise information being given to consumers, by encouraging companies not to double-up on information and include information directly related to consumers’ needs;

• Provide oral disclose that is easier for consumers to understand;

• Simplify general advice warnings and make them more meaningful for consumers;

• Streamline product disclosure requirements for basic deposit and general insurance products;

• Reduce excessive disclosure where services are provided through intermediaries;

• Provide a distinction between general and personal advice;

• Clarify the jurisdictional extent of the law; and

• Modify authorisation procedures for representatives, certain staff training requirements and the coverage of non-cash payment facilities.

The proposals paper says the principles of the Act are “potentially being undermined” by the disclosure requirements as they stand.

The industry can issue written comments on the proposal by June 3, but the Government favours face-to-face meetings rather than written submissions.