In a statement on Friday, ISA chief executive David Whitely said, “The findings highlight persistent behavioural problems within the wealth management arms of the big banks.
“The banks and their subsidiaries have a deeply entrenched sales culture that runs counter to consumer interests and is clearly incompatible with the public policy objectives of compulsory superannuation.”
Meanwhile, the Australian Bankers’ Association (ABA) has responded to the report by saying that the banks were currently working with government and regulators on a number of reforms.
“ASIC has an important role in undertaking regular reviews of the industry and we are committed to working with ASIC and other stakeholders on the findings of this report,” said ABA executive director of retail policy Diane Tate.
“The industry is driving its own reforms to improve the quality of financial advice. This includes a new industry-wide hiring protocol so banks can find out more about a financial adviser’s previous conduct history.”
NAB also responded to the report, commenting that “since ASIC began this project in 2015, NAB has made a number of changes across its wealth advice business – including its adviser audit practices – and continues to make improvements”.
“While ASIC has not yet shared with us any findings that relate to NAB individually, we welcome any discussions the regulator wants to prioritise that will benefit our customers,” the bank said.
ASIC Report 515 Financial advice: Review of how large institutions oversee their advisers examined the conduct of financial advice licensees controlled or owned by AMP, ANZ, CBA, NAB and Westpac, looking at how these firms responded to non-compliance between 1 January 2009 and 30 June 2015.
The report found a number of “areas of concern” including failure to notify ASIC of serious non-compliance concerns, significant delays between the institution becoming aware of misconduct and reporting it to ASIC, and inadequate background and reference checks.
So the union funds are complaining about a “deeply entrenched sales culture” in the banks. That might be true, but the unions need to get their own house in order in relation to their “deeply entrenched false and misleading advertising culture”.
Oh wait, I forgot. The unions have ASIC immunity.
I normally don’t comment but feel strongly enough about this issue to do so. I worked as an adviser at a big 4 bank in the late 90’s early 2000’s, which Bank? Not only was rogue adviser behaviour swept under the table, they actually encouraged it with unethical advisers given, bonus’s, promotions, dinners with management and state and Australian awards. This sealed the end of my career at that particular bank as I couldn’t stomach the attitude of management towards these rogues. It was very satisfying watching them eventually get caught out and in one particular instance, dismissed with immediate effect and walked out by security guards!
Sadly Chris, I don’t think much has changed. I’m tired of what I am seeing around me, with incentive schemes that attempt to cloak a ‘revenue at all costs’ mentality under the guise of a ‘balanced scorecard’ approach. And I’m really tired of seeing ‘dodgy’ advisers being rewarded and having my concerns dismissed. I need to get out because all I want to do is give good advice and service to my clients, but I have a young family to support and can’t afford to be unemployed or start a practice from scratch.
Mr Whitely is the mouthpiece for one lot of vertically integrated funds management and advice businesses, slagging off another lot of vertically integrated funds management and advice businesses. As they say in the classics “He would say that….”
When a member can go to a Union Super Fund adviser and get recommended something different than the house product, then you know that they are serious about what they do. When ASIC found that around 70% of people getting advice from AMP planners ended up in AMP products, they hit AMP with an EU. I have no doubt that the percentage of people getting advice from Union Super Fund planners end up in the Union Super Funds that the planner is aligned to, with the crappy insurance cover from the same aligned fund. When will ASIC review these inter-connected structures and conflicts of interest? I wouldnt want to be hanging by my fingertips waiting for ASIC to act.