Speaking to ifa yesterday, Nationals Senator John Williams said there is growing support among MPs for a formal royal commission process, as recommended by the Senate inquiry into the performance of ASIC last year but rejected by the Abbott government.
“I have spoken to a range of backbenchers that are now supporting the Royal Commission,” Senator Williams said. “They have constituents affected; the push is growing.”
Mr Williams has provided terms of reference to Treasurer Joe Hockey for a wide-ranging royal commission into “white-collar crime” that will include the financial planning industry.
The fact that another household name advice provider has been found to have harboured inappropriate or low-quality advice will further erode public confidence in the industry, Senator Williams suggested.
“We now have three of Australia’s largest financial institutions where wrongdoing and misconduct in financial planning has been carried out,” he said, referencing the Commonwealth Bank and Macquarie.
“Something needs to be done to restore confidence to investors and people who are having their money managed. Australians need good advice and safe products.”
The senator – who was instrumental in getting the Senate inquiry into ASIC off the ground and is an outspoken critic of vertical integration – said the corporate regulator also has questions to answer.
“I’ll be questioning ASIC this week in Senate Estimates,” he explained. “If they have known for some time perhaps a little transparency would have been helpful.
“Telling the truth never hurts.”
Senator Williams, something HAS been done. There has been a swathe of inquiries and reforms over recent years and they are having an effect. There has also been admission of past failings and lots of compensation paid out to affected clients.
A Royal Commission isn’t needed to reform financial planning because reform is already happening. A Royal Commission won’t improve confidence, it will destroy it. The only outcome of a Royal Commission will be greater reliance on advertising and PR for financial decisions, rather than professional, regulated advice. More and more Australians will end up invested 100% in geared property, with Storm like catastrophic consequences once the market corrects. More and more Australians will end up with “simple, no medical” insurance that doesn’t pay out when they need it most, because of all the restrictions in the fine print.
Where is the FPA and the AFA on this? We need a voice to balance out the hysterical, biased and synical reporting. The fact is, 37 advisers is only a very small portion of NAB’s overall advisers. Just 2%. And the NAB is on the front foot, compensating disaffected clients. Can anyone please prove to me that other professions such as medical, legal and accounting have fewer than 2% of troublesome practitioners? We all know they have their fair share of problems. But without a papertrail, a free ombudsman service and a large institution with deep pockets, most disaffected clients/patients have little recourse and are swept under the carpet. Let’s talk about the benefits of the financial planning system. It’s not perfect, but the NAB case highlights some genuine positives as well as the negatives. Let’s hear both sides please.
All they need do at this stage is investigate the banks, that is where the corruption of advice is the most commonplace. And I am not blaming advisors, rather the greed of management.
We need a Royal Commission on Politicians wasteful resources. On their lie cheating duding ways. They should account for every transaction they are responsible for and have it on public record for all to see.
They are just a mob of greed hungering buzzards just festering on news to feather there own nests.
This WILL be good once our old learned’ friend Jacqui Lambie gives her 2 cents worth….because that is her maximum value to anyone.
2 cents is now worthless and a has-been…mmmmmm, wishful thinking.
To quote Jacqui’s recent classy description of her ideal man….”they must have heaps of cash and a package between their legs”….she obviously has an in depth understanding of vertical integration!
I just cant wait to see her answer when asked about a royal commission…but I imagine she will say…..No, we have already banned commissions,so there will be absolutely no more commissions.
The comedy show will be coming soon.
If it wasn’t so serious, it would be funny.
What about Real Estate agents and Mortgage lenders as well?
Why don’t these MP’s save some money and make the RC about vertical integration and management bevaviour with regards to the pressure put on employed planners chasing volume/revenue KPI’s and targets. This seems to be where the bulk of the problem lies. I hear that a certain bank is putting pressure back on its planners to hit revenue and have recently monitoring client meeting activity. 6 client meetings a week is the standard. How will clients ever be put first with institutions like these?
You are kidding.
What an abject waste of taxpayers money this would be.
Is there no end to this stuff ?
While not excusing wrong doing by a minority in the financial planning industry, Senator Williams either chooses to ignore the facts or is simply ignorant, the very evil of vertical integration is the only thing that will ensure compensation in a timely manner. Good luck getting 10 to 15 million out of a small boutique dealer.
The big instos ( both banks and industry funds ) have caused the mess we are in by implementing strategies to increase FUM by taking short cuts rather then as a consequence of established financial planning processes.
They should have known better and now they have no self defence. They have both lobbied government to get what they want and in doing so have compromised themselves and their status in this industry.
When are we going to have a Royal Commission into the political system structure i.e. branch stacking, whitewashing, nepotism, cronyism, union control and ISN disclosure?
When are we going to have a Royal Commission into the Legal and Accounting professions as well to investigate those who have ripped off their clients.
Once again the sins of a very small minority are going to be used to bash the greater majority simply to make politicians feel good. This coming from the most self-centered group of people in the country, many of whom have never had a real job and advised real people.
I have had enough of inquiries into our profession. What a waste of tax payers money.