The interim FSI report had gone a step further than the Wallis Inquiry of the 1980s in concluding that “the combination of disclosure and financial literacy, whilst important, are not sufficient in our system,” Mr Murray said. “We are trying to figure out where to place financial services in a spectrum of products and services in our economy. “We take very seriously the regulation of air safety, pharmaceuticals and medical services, so there is a spectrum and we’re trying to figure out where financial services fit in that spectrum. “Whilst it would be simplistic to say that people don’t die from financial services when they’re badly designed, what’s been very clear to us, particularly in the public forums we’ve held is that the degree of suffering from people who do lose substantially is very significant.
Mr Murray was chief executive of the Commonwealth Bank of Australia from 1992 to 2005, during which time many people believe a culture of chasing product sales developed to the detriment of clients seeking financial advice. “A regulatory arrangement in which the regulator is trying to second guess every new product in the market does not work,’’ Mr Murray said. “It might be important in air safety but it might not be necessary in financial services.
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