Less than 35 per cent of Australians believe financial advice practices to be ethical businesses, new research from the Governance Institute of Australia has found.
The organisation’s annual ethics index has found Australians’ faith in businesses’ capacity to act ethically has dropped in the last year, with financial services and banking in particular taking a hit in the wake of the royal commission.
“Australians expect high standards from their financial institutions, but our research suggests that these are far from being met,” said Governance Institute chief executive Steven Burrell.
“The community’s faith in some of the country’s biggest corporations has been sorely tested, following a turbulent 12 months in Australia’s banking finance and insurance industry.”
The Governance Institute’s data showed that only 33 per cent of Australians believe the banks to be ethical, with 38 per cent perceiving the industry as unethical.
This placed financial advice ahead of banking, which was perceived by only 28 per cent of Australians to be ethical, while 55 per cent believed it to be an unethical industry, making it the lowest-rated industry in the index.
“Australians perceive life insurance companies and retail banks as unethical, arguably influenced by commissioner [Kenneth] Hayne’s hearings,” Mr Burrell said.
“In contrast, the education and health sectors continue to hold the highest perceived level of ethical behaviour.”
Mr Burrell said further scandals uncovered by the royal commission will only serve to diminish the public’s faith further.
“The message here is clear — those who are seen to be working selflessly for others are generally more trusted,” he said.
“If corporations like the banks and other financial institutions continue to be exposed for pursuing profit to the detriment of their customers, we can expect confidence in them to drop even further.”
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