This week the Federal Government tipped out the first instalment of consultation on urgently needed consumer safety reforms, focussing on glaring gaps in oversight and governance of Managed Investment Schemes. 

A good first step though it was, the paper fell short of the distance of travel required to protect Australians from Shield and First Guardian-style collapses.  

Without broader, more ambitious reform, the same structural weaknesses that allowed poor‑quality and, in some cases, fundamentally flawed schemes to reach everyday Australians will remain firmly in place. 

The consultation paper includes only one proposed reform on switching risks. Yet the experiences of Shield and First Guardian victims show the need for stronger obligations to ensure consumers are truly better off. 

The key to making consumers safer is to remove any conflicts of interest wherever they arise in the chain and strengthen safety obligations on any process that involves switching a person’s super. 

Such measures would make the biggest difference of all to ensure Australians’ precious life savings are much safer from harm. 

The other key reform to strengthen consumer safety is to legislate key elements of the promised Delivering Better Financial Outcomes (DBFO) reforms to meet the urgent large-scale need for safe retirement advice. 

We’ve consistently called for a detailed deep-dive review on conflicted remuneration and for the official guidance to be refreshed to ensure there are no loopholes in this key consumer safety protection. 

We look forward to seeing proposals to tackle lead generation. We’d like to see a ban on aggressive selling tactics through social media ads and cold calls by expanding anti-hawking laws to prevent contact aimed at generating or transferring leads for personal financial advice or super. 

The collapses of Shield and First Guardian were systemic failures, and the policy response needs to reflect this. Now is not the time for incrementalism.