Speaking at a recent event in Sydney, the chief executive officer of Westpac, Peter King, reflected on the Quality of Advice Review (QAR), specifically discussing the recommendation made by Michelle Levy, the lead of the review, that banks and other entities should be incentivised to offer advice.
Namely, in her final QAR report, Ms Levy suggested that banks, superannuation funds, and insurers should be allowed to provide limited advice exempt from best interest duty. Instead, the QAR lead proposed the introduction of a good advice duty that would attach to personalised financial advice offered by the institutions.
Asked whether Westpac plans to return to financial advice if Ms Levy’s recommendations are adopted by government, Mr King suggested that while the big four has no plans to return to the high net worth end of town, it could play a role in making the financial advice system more accessible and effective in addressing the financial literacy gap in Australia.
“If you think about high net worth, very specialist, broad financial advice, there’s not really an aspiration for us to get back into that market. And so, but that’s the top end, if you like, what’s really missing in the country now is the mass market,” Mr King told the AFR Banking Summit.
He explained that currently, an increasing number of customers are doing their own financial planning through social media platforms and opening themselves up to fake investment prospectuses and scams.
“One of the things that I hate looking at is customers who have lost money in an investment scam, it’s massive. And you go, what’s happening, and they’re doing their own financial planning, through Google, Facebook, and Twitter and they’re getting access to fake investment prospectuses. So that’s what’s driving me nuts. You then get the money going in and it gets out of the country and they’re life-changing losses for individuals. And so that’s the passion for me,” Mr King said.
“It’s about how do we, how do we help people become more financially literate, how do we work with the telcos to stop these texts, how do we work with the social platforms to pull down the dodgy prospectuses, how do we put sand in the wheels to make the money not flow as fast when people are subject to it?”
He emphasised that at the core of this “big system” lies the issue of financial illiteracy among people and their exploitation, and ultimately, banks need to respond to it.
“You step back and you go at the heart of it, we’ve got people that are not financially literate enough, we’ve got people taking advantage of them and we’ve got to respond. So, I think the financial, where we’ve got with the review I think is good. I think we need to change it so it’s easier, but it needs to solve the problem at the top end of town, the high net worth end of town as well as the mass. It’s really important,” Mr King explained.
Westpac and its big banking peers ceased providing financial advice to retail clients after the damning royal commission.
Stupidity at its finest……
Bank shareholders be prepared to pay billions of dollars in compensation again, the banks haven’t finished doing the remediation work from the Hayne Royal Commission, who will be the blame when everything goes wrong….You guessed it! “History teaches man that man learned nothing from history.”
Here we go again.
“One of the things that I hate looking at is
customers who have lost money in an investment scam, it’s massive. And you go, what’s happening, and they’re doing their own financial planning, through Google, Facebook, and Twitter and they’re getting access to fake investment prospectuses. So that’s what’s driving me nuts. You then get the money going in and it gets out of the country and they’re life-changing losses for individuals. And so that’s the passion for me,” Mr King said.
With respect Mr King what drives the rest of us nuts is the thought of your bank (and super funds) getting back into financial planning on the premise of trust us we have changed and can now help you (again)…!
Please just stick to your core business of lending and deposits and don’t become a wolf in sheep’s clothing (again)…
Wow wow wow! How on earth is this even being contemplated. The most unscrupulous institutions in Australia are going to educate people ha ha ha
Ha ha, this is so funny; the biggest scammers in the industry were the banks before they were kicked out of advice; now they are the mouse, more like a rat that wants to be put back in charge of the cheese factory. If this weren’t so frightening, it would be funny.
Looks like we are turning into America …. greed is good! Political puppetry at its best!
The insanity continues……..
So let me get this straight…. Poor Peter King is going nuts with bread and butter Australians getting scammed, but he was happy with the fee for no service, ethical stance taken by management (of which he was a part since 1994) AND the bonuses for the bankers prior to exiting planning.
Not only that but he wants to be the white knight on a horse to rescue everyone.
This is an utter failure of legislation and Government.
If anyone believes that banks are in it for anything other than profit and return to their shareholders they have rocks in their head.
It is about generation of revenue first,second & third at every turn.
And there it is, all the in fighting amongst advisers and all the red tape that is now in place and here they come again. But hey we all new they would right?
Ok, if this was to happen, surely the regulator would determine whether they and their executives would be fit and proper to hold a AFSL.
Each of the big four have been hit with many breaches and millions of dollars in fines and reparations’ for their previous actions of wrong doings.
Similar to what happen to James Packer and Crown Casinos, perhaps they should have restrictions, maybe a a sizable bond, that would be forfeited for breaches straight up. And finally like small AFSls, lose the license as well.
sorry…..I’ve been dreaming.
No, it wouldn’t be about money would it Mr King.
If you are so concerned about investment scams, Westpac could just simply put a bulletin, ad, or email out about it. Why does it require your financial “advice”?
So the banks are protecting clients from investment scams. So who is going to protect clients from the banks or is that the same thing?
They could of course suggest that the clients go out into the real world and seek real financial advice.
That’s a novel idea.
Wow, so king of a Big Bank to move into advice just to help people avoid falling victims to scams and non-ethical people.
The Big 4 are so thoughtful and for-the-people, to consider getting back into the education game to improve financial literacy….yes, that’s what they’re all about
How the hell is this allowed? They all did way more harm than Dover but are still around cos they are too big to fail and line ASICs pockets.
Here we go again, the banks have seen an opportunity to get in on the fun and games and make some money without the responsibility, research or SOAs required to address any best interests for the client…and they want to be able to incentivise them???? It’s not about educating the “masses”, it’s about “how can we make money from the masses”…nice one