The interim report noted that a running theme through all of the issues relating to culture and incentives are questions about how industry participants are paid, including how bonuses and other incentives are calculated.
Another theme identified by the report related to conflicts of interest and duty, and the confusion of roles, including issues about FOFA’s treatment of conflicts of interest that can, and should be, managed.
However, the report said it goes further, requiring a consideration of the structural issues that surround financial advice.
“In particular, the second theme draws attention to consequences that appear to be related to, if not stem from, some entities being vertically integrated, in the sense that the entity manufactures and sells financial products while, at the same time, advising clients which products to use or buy,” the interim report said.
“And the second theme also embraces the issues that emerged in the first round of hearings about the confusion of roles and responsibilities of, for example, mortgage brokers and aggregators.”
The last theme identified relating to financial advice was the effectiveness of the regulators.
In particular, attention was directed to what responses regulators can make, and what responses regulators should make, to conduct of the kinds examined in the commission’s hearings.
A necessary part of the second branch of that inquiry is to consider whether the responses that were made have proved to be satisfactory.
Other questions posed in the interim report include whether grandfathered commission provision should be changed and, if so, how far they should be changed and when those changes should take effect.
In addition, the Hayne commission asked whether the acknowledgement of specific wrongs be a component of enforceable undertakings.
Adrian if you watched the hearings as I did, and not like some just read the titillating headlines, you will understand that the Commission was attacking commissions and incentives for bank advisers and the DIRECT product floggers, so happily endorsed by ASIC to sell products under GENERAL ADVICE. I heard no specific attack on commissions for life insurance for IFA advisers. But I could still be surprised !
you will be… it is a witch hunt with Labor bozo’s beating their drums.. not sure who will really win when planners leave en mass..
just a plnr sitting here waiting to get whacked again.. when will someone highlight any POSITIVE things that Australians get from this crap industry
Unfortunately positive news doesn’t sells papers and get the clicks required to maintain their jobs in the news industry!
ISA is vertically integrated, manufactures it’s own products and then sells advice on using them, right?
Yep.. but that is just too simple for the RC to understand..
What it’s actually done is expose systemic issues in the methodology used by the Haynes biased inquiry. Plenty of other issues, especially in the product manufacturing side (management liability) and the ISA advice space that were not even touched upon sufficiently. I lost respect for this muppet and his minions within the first two months.
….first 2 weeks….
How many of these financial services enquires do we need? Every time we reach the same resolve and then do nothing about it. Again. the issue is the cosy relationship that ASIC have with the big end of town. Can any rational person not see the stupidity of attacking the now defunct Dover over a client protection policy when the big banks and AMP have been such massive offenders over such a prolonged period of time?
The question everyone wants answered is WHY, APRA and ASIC have done little over the last two decades , Under Medcraft’s watch a few enforceable undertakings but all this coruption was going on in plain sight under their nose , The fault must lay at the feet of the regulator when he decided 20 years ago that ASIC wanted to police as few licenses as possible the Oligopoly was formed and the rest is history a great industry ruined . No rational person can understand it ? Were palms creased?Who would investigate the regulater?