Senator and former financial adviser Cory Bernardi says the banks should retreat from wealth management to their core historical functions and that reform of the sector is required.
In an audio recording posted to Twitter, the South Australian senator and leader of the Australian Conservatives said the royal commission has demonstrated the cultural problems within the big four banks.
“The culture within the banking industry has been driven by their own needs instead of those of the customers, which is very disappointing,” Mr Bernardi said.
The senator said the culture demonstrated in the Wells Fargo scandal in the US – whereby bankers were alleged to have created millions of fraudulent accounts – has now reached Australia.
He referenced the testimony offered by Westpac official Carol Separovich before the royal commission this week, which indicated local bankers were seeking to cross-sell customers as many as eight bank products.
As a result, Mr Bernardi – who was a self-licensed financial adviser and stockbroker before entering politics – said he now supports reform of the banking sector, including potential dismantling of vertical integration.
“I do think there needs to be reform. Banks have a rarefied niche in the community. It’s a very important space,” Mr Bernardi.
“I think they should go back to custodians and lenders rather being traders of financial markets and financial products.”
The comments are in contrast to those Senator Bernardi made in an interview with ifa in 2017, in which he said he supports “deregulation” of the financial services industry.
However, in that same interview he said the Australian Conservatives supported a royal commission despite previously opposing the inquiry, convinced by the Commonwealth Bank money laundering scandal.
The call for banks to retreat from financial product manufacture comes as NAB has announced it will seek to divest from MLC, and ANZ has sold its wealth business to IOOF.
FASEA has conceded its guidance on scaled advice may not be legally reliable, ad...
A key super industry body has suggested the government’s forthcoming reforms t...
With rising compliance costs and more risks abounding for planners who try to be...