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.
Vertical integration not the issue, its transparency of end to end value proposition and ensuring customers are given choice, and understand the difference. If its vertical integration all the way through the value chain then there must be a cost benefit for members. Not sure the banks have been delivering on the cost side. I wonder how vertical integration in industry funds will be tackled, many have moved into advice, they offer NO choice, and fees and charges continue to be embedded in unit prices so that members can’t work out the true cost of these funds. As for protection they have been offered plenty of protection, through a union hijacked new member process, and extending to an advertising campaign that suggest the only thing that matters is return. What about cashflow, tax, wealth protection, TTR strategy…………. The list goes own benefits that come from advice.
Totally agree. TBH who cares if they are ‘cross sold’ 8 products, if they are all required or desired? Sounds efficient,and what capitalist commercial arrangements in a democratic country are all about. I am an IFA with own AFSL and charge F4S not comm’s, but I still understand the value to the masses that the banks represent in getting volumes of people sorted out. Let’s be honest. most people are either lazy, or morons, or nice but don’t care, If the banks force them to take out insurances that they need for family protection as part of a loan, isn’t that sensible? It isn’t VI or multi sales that is the problem, it is ASIC not being viglant enough around BID and enforcing that. If BID is adhered to and enforced, then there literally cannot be a problem with who supplies and how.
Idiots like this loser who couldn’t make it but is now grandstanding makes me sick.
I’m surprised your back doesn’t hurt from all the back-flipping you’re doing!