The ‘scrutiny of financial advice’ inquiry hearings have demonstrated the double standard for treatment of institutional advice executives, says an industry association.
Hauled before a tri-partisan senate inquiry in Canberra on Tuesday, representatives of CBA, Macquarie, ANZ and NAB turned attention to the activities of former employee advisers still operating in the industry.
While Greens Senator Peter Whish Wilson said in a press conference before the hearing that “vertical integration is the elephant in the room”, exchanges at the hearing focused more on the advisers under the banks' management, rather than the managers themselves.
Commenting on the story, a number of ifa readers suggested the bank executives were attempting to shift blame to advisers once again.
“What about the dodgy execs that created the unsustainable sales models in the first place and went behind ASIC's back to manipulate files etc. Where are they now?” one ifa reader asked.
AIOFP executive director Peter Johnston said the comments from the bank executives showed that the senators leading the charge against inappropriate advice were focusing too heavily on intermediaries and independents, not bank executives.
“We are frustrated with the two sets of rules the media, lawyers and the regulators apply when investigating poor advice or more importantly product failure in our industry,” Mr Johnston told ifa yesterday from Shanghai, where the AIOFP will next week take part in the Australian Food, Wine and Investment Expo.
“If an independent practice is involved with product failure or poor advice, the advisers and management are pursued; if the adverse publicity does not finish them, bans and the AAT will.
“[Whereas] if the institutions are involved with bad advice the specific managers responsible for the events are quietly shuffled sideways or out the door and the advisers are blamed, not the culture they operate in. The result [is that] nothing material changes.”
Mr Johnston said that if the senators are serious about “consumer protection” then regulators and institutional executives should not be able to get away with blaming advisers.
However, a number of the executives did publicly apologise for poor advice provided, including CBA's Ian Narev and ANZ's Joyce Phillips.
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