A royal commission into the financial services industry is unnecessary, and the money would be better spent on funding ASIC and fixing culture issues, according to AFA chief executive Brad Fox.
Speaking at a media event in Sydney yesterday, Mr Fox said there have been about 20 government inquiries into the industry that have shown where the biggest issues lie, including corporate culture and ethics.
“So let’s concentrate on what we do to remedy them. There is considerable work going on at the moment to look at how ethics is taught and trained for financial advisers,” he said.
“The money would be better spent on providing ASIC with greater resources to police the more than adequate rules we already have in place.”
Mr Fox added that those in leadership positions should undergo ethical training as well. However, that does not mean the industry needs further reform.
“[Leaders] need to be on the same understanding of ethics,” he said.
“We have the most stringent financial advice rules in the world. We have a very robust financial system. It’s not perfect, but let’s spend the money on making sure that we’re using the rules that are in place.
“It’s not the rules [that] are broken. It’s been individual cases of conduct.”
Calls for a royal commission re-emerged since the allegations arose about CommInsure mishandling its claims, but opinions have been divided.
Industry Super Australia believes the call for a royal commission is justified, while the Australian Bankers' Association believes it is a waste of taxpayer funds.
Kim Shaw, a principal at law firm Maurice Blackburn, said the royal commission is a long overdue, necessary and welcome measure.
"The personal costs of the industry's behaviour for people affected – many who are highly vulnerable, under significant financial pressures or very unwell – cannot be overstated," he said.
"It is absolutely critical that all sides of politics support this royal commission."
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