Four major insurers dominate the Australian general insurance market, which gives the appearance of choice with the offer of many brands, says the Productivity Commission in a report on competition in the financial system.
The four majors underwrite more than 30 brands while two of the smaller insurers underwrite 50 brands between them. One company underwrites 23 of 25 pet insurance brands.
In some areas of financial services, proliferation of products with slight variations in features has become a burden for providers as well as consumers, says the report.
About 75 per cent of Australians lodge their tax return via a tax agent, many unnecessarily, because the tax system is complex and difficult to understand, a parliamentary inquiry has heard.
The Tax Institute says individuals with straightforward affairs don’t need a tax agent but find the system hard to access and cannot sort misinformation from correct information so feel they need to pay for expert help.
The Institute applauds the ATO’s move to electronic communications but says it could be improved by the ATO pre-filling as much information as possible and more transparency in data collected.
The new Australian Financial Complaints Authority (AFCA) will take over the work of three external dispute resolution schemes and be able to consider claims of higher value when it comes into being in November, 2018.
AFCA will replace the Financial Ombudsman Service (FOS), the Credit and Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal.
They hear disputes involving banking, credit, insurance, investment and superannuation. Members of these industries pay fees that fund the schemes.
Industry members of FOS and the CIO will have to retain those memberships for 12 minutes after AFCA opens its doors, so existing matters can be processed.
Australian households spend 5 per cent of their annual income on their cars. That figure includes buying and maintenance, making a car the second most expensive purchase after a house.
Despite the cost, and the fact that many people need a car to work, the consumer legal protections for new car buyers can be difficult to enforce, and for consumers to understand, finds a report from the Australian Competition and Consumer Commission (ACCC).
The consumer watchdog’s draft report into the new car retailing industry calls for regulation to ensure car manufacturers provide technical information to independent repairers.
Comparison websites provide the convenience of being able to compare different products online, and many of us would assume what we get is the same as buying a bespoke service. When it comes to life insurance we’d be wrong.
Research by Rice Warner has found the commissions that insurers pay to life insurance websites is the same as that paid to qualified financial advisers who spend time assessing the consumer’s needs to come up with a tailored offer of cover.
When did you last write a cheque? Probably not for a long time, and if you are in your twenties you possibly have never owned a chequebook. Cheques now account for only 1.2% of all non-cash transactions in Australia.
Cash use is also falling as more Australians switch to electronic payments, although the folding stuff is still the most popular way to pay.
Withdrawals from ATMs dropped 6.6% in the 2016 financial year, with about $700 million withdrawn, compared with $750 million in 2014.
Australians aged 65 and over are embracing digital technology, and since they make up 19% of the population this has implications for business.
People who can remember when their household first got a television (black and white, of course) are more likely than the general adult population to use a tablet device.
About 85% of them go online at least once a day and half login three or more times a day.
Baby boomers are moving into retirement and starting to use some substantial superannuation balances, but most of the conversation around super is about building savings.
The financial industry is on notice from the Productivity Commission that it will investigate transition to retirement and pension products in its inquiry into the competitiveness and efficiency of the super system.
“The Commission intends to assess whether the system is meeting the needs of members during these phases, including via product innovation that addresses tax effectiveness, transition and longevity risks,” says the Commission in its draft report released this month.
The Federal Government faces calls to regulate property investment advisors in the same way as financial advisors following an exposé of land banking scams.
Many Australians have invested in land developments that will prove to be worthless, having been enticed by high-pressure sales tactics and misled into thinking they are buying land that will soon jump in value.
The Senate Economic References Committee has called for tighter controls on property investment advisors, saying they should be regulated by the Corporations Act.
Consumer advocates have long been concerned that debt management firms charge people for services they can access for free.
Consumers suffering financial hardship are being charged a variety of fees by firms that promise to help restructure personal debt and offer no refund if they fail.
The fees are high and often opaque, according to an investigation started by the Australian Securities and Regulation Commission (ASIC) following complaints by consumer advocates, banks, lawyers and ombudsmen schemes.