Appearing before a parliamentary committee on Friday, RBA governor Philip Lowe said the royal commission hearings into superannuation over the past two weeks has “really showed the benefit of sunlight”.
“What we’ve seen through the royal commission is deficiencies in all three areas: the trust between financial institutions and communities has been strained, there has not been enough focus on customer service (it has been more of a sales mentality than a service mentality), and risk management has not been all it should have been in financial intuitions,” Mr Lowe said.
He was particularly focused on conflicts of interests within financial services, which he said “seem pervasive”.
“Dealing with those conflicts has not been top-of-mind in many financial institutions and it should have been,” Mr Lowe said.
“Conflicts can be dealt with, they can be managed, but they need to be top-of-mind and if they are not top-of-mind in financial instructions then it continues to strain the bonds of trust between institutions and the public.”
He also drew attention to remunerations structures within financial services, which he said have “driven quite poor behaviour in many cases”.
“This has been recognised [by government] and [APRA chairman] Wayne Byres has talked about it,” Mr Lowe said.
“Dealing with those two issues – the conflicts of interest and the remuneration structures within financial institutions – seem to me to be high priorities because we need to rebuild trust, we need to have a very strong focus on delivering service rather than sales, and risk management.”
Strangely, he omits the most most evil conflict: the funding arrangements between the big banks and ASIC.
Even more strangely, he omits to say this was not investigated by the Royal Commission.
Paid pipers know what tunes to pipe, what tunes not to pipe, and who conducts the band.
Yep when you pay for the police, you own the police, what else do they expect.
Bloody Over Complicated O’Dwyer again making it a users pays ASIC financial police force.
ODwyer – you have to go !!!!!!!!!
this from an inept organisation who has blown the biggest housing bubble in the history of man go back to your dismal science and find something useful
A more appropriate comment would to ask how the sunlight reflects on Mr Kell and ASIC generally.
What event ‘revealed’ at the RC could not have been dealt with more expeditiously by ASIC simply doing its job properly?
Mr Medcraft had lunch with the NAB to discuss “alternative breach reporting processes’.
Why was Mr Medcraft not called up to explain himself, and the effect of his lunch on consumers?
HA HA HA…Fees for no service… The RBA would know all about that. ‘NO CHANGE’
P*ss off and stick to your own little corner of the back yard. RBA analytics and processes of measuring our economy are dated, they’re hopelessly useless at controlling or maintaining their own mandate, and yet comment on our turf? They’re like a blind watch dog that barks all the time but does nothing really at all. Get back in your box and try to do something constructive yourselves instead of sitting on your hands these last 5 years – talk about the ultimate fee for no service rip!
This is not a case of sales versus advice / service, but rather a case of amateur versus professional. The sales professional in any industry acts in the client’s best interest to ensure longevity of career.
what has the reserve bank got to do with the financial services sector ….. but out !!!
Best of luck with your “” surprising “” findings Mr Lowe. There have way too many instances where the regulators have been notified of corrupt behaviour within the management ranks -names and all – no action. They are a protected species and when they are removed the public and indeed advisers will be able to move on, if not, we will be all RC’ d again in the future and waste a few 10s of millions more. NO balls or guts at regulator level.