Speaking at a media briefing in Sydney, SG Hiscock portfolio manager Hamish Tadgell noted that the Hayne royal commission is not one in the conventional sense of it being evidence-driven, rather it’s “a series of case studies that have been brought forward basically to a political agenda or a political timetable”.
“I think what [Hayne] did in that second round [of the royal commission] apparently is just brought forward a whole lot of other case studies and then they’ve just gone through and clearly drawn out the very bad examples,” Mr Tadgell said.
“I’m not condoning for a moment that they shouldn’t be drawn out but this idea that that’s potentially representative of what it is more broadly I think is probably wrong.”
Instead, Mr Tadgell pointed to the inquiry the UK ran in 2011 as an example of a proper review into a financial services sector.
“It was really two key findings that came out of that inquiry. The first one was that banks have to be financially strong, and the second was that you need to introduce more competition,” he said.
However, Mr Tadgell said the Hayne royal commission doesn’t actually have a mandate to introduce more competition to the financial services system but thinks it will be a consequence of when it releases its findings.
“I think it’s something that the market’s probably not thinking about enough at the moment, but I think that you will see more competition,” he said.
“How did competition manifest itself in the UK? They made it easier for banks to get licences, so you had 14 new challenger bank licences issued in the UK since that inquiry.”
How many brand new ANZ Bank Customers across Australia were issued with a Visa Credit Card with a $20,000.00 Limit with their Home Loans in 2004. We obtained a second Home loan of 20, 538.98 to pay the credit card balance of $15,058.84 on 18 October 2004. The ANZ has now modified its banking records and are stating that the Credit Card had a limit of $2,000 back in 2004.
Macquarie Securitisation Limited Perpetual Limited and Mortgage Ezy need to be called before the Royal Banking Commission they started a Mortgage Agreement on 15 August 2003 . Legal action was taken against me by Perpetual Limited. However the legal costs were all paid for by Mortgage Ezy. Therefore the Plaintiff needed to be Mortgage Ezy not Perpetual Limited On the Home Loan before purchasing the investment property at Lowood the required monthly payment on 14 June 2006 was $1424.204 per month by 9 January 2007 we were paying $430 per week which is $430 times 52 divided by 12 is 1863.333 per month. Or an extra $439.129 extra per month on the Home Loan . We lost everything due to the legal representatives not including all the facts in the Summary Judgment Hearing and Barrister failing to advise the Judge of his Supreme Court commitments on what was supposed to be day three of our trial.
The problem lies in everyone treating financial planning as a “do you want fries with that” add on service to increase revenue streams. Please we see Real Estate Agents applying for AND GETTING an AFSL to add financial services on to their core business, mortgage brokers, general insurance brokers, accountants, banks and industry super funds. There is no interest here in offering a service of any value just adding an income stream. Sadly when they realise how much cost and time is involved they start cutting corners and then the problems really start. We need to put advice in the hands of the adviser, the ones who will wear the penalty when things go wrong.
[quote=John Edwards] Why do we have to wait for the next market correction for this behaviour to be exposed ? [/quote]
Or is this the game thy are playing to show how bad they are and let the industry funds fall on their own sword? At the cost too the members again……
[quote=Anonymous]Its like watching a bad movie –
Check this report from PWC 2015 talking about the masking of returns and how they get away with it, good read and understanding. This is the stuff the RC should be focusing on!
https://www.pwc.com.au/consulting/assets/publications/comparing-super-funds-15.pdf [/quote]
Why worry about investment returns when you are being charged fees for no service in a systematic manner? The best line of RC so far – Commissioner: “Did you turn your mind as to whether taking fees you were not entitled to was a criminal act?”
Industry fund problems and issues pale into insignificance when compared to theft. Even better, read the Parliamentary report which triggered this RC. [u]Files in a bank’s care and custody were altered to support their actions along with the inclusion of fictitious documents.[/u]
How about we deal with that alleged criminal behaviour first and then the Industry funds disclosure practices?
Steve H how about we single out every financial adviser across the country to have their license suspended until the behaviours of the banks are addressed. In the meantime the industry super funds can do whatever they like because ….
A better question would have been for ASIC, when it first became aware of the issue 8 years ago, to ask itself “Should we turn our ASIC mind as to whether taking fees the AMP was not entitled to was a criminal act?” And to then ask why ASIC took 8 years to do something.
Nah, the best line from the RC was to Michael Wright, Head of Advice at Westpac;
“Do you think of yourself, Mr Wright, as a sales professional?”
When there is a Royal Commission, why not deal with both? If Industry Funds are not disclosing, why should anyone disclose? In reality, I can not see either being addressed – but a lot of Financial Planner will be targeted.
Regardless it’s poor behavior.
What we need is a bank owned and run by government so that the others are tethered to a range of behavioural standards…oops, we had one of those didn’t we, but we privatised Commonwealth Bank and look what happened. Here’s an idea: why not allow anyone who wishes to have a default super fund that invests only in the Future Fund? It could/should be the default fund for anyone who doesn’t make a specific choice and it should be open to all employers to contribute the minimum 9.25% of gross wages for all employees of all employers, no matter how little they earn or how few hours they work. The ATO could collect contributions and distribute them to the Future (super) Fund. We can’t rely on private sector for everything and especially when it’s not profitable for them (accounts less than $10,000 are highly unprofitable UNLESS they have opt-out insurance options to bolster them) and we should have at least government insurer for things like Workers Comp and small Income Protection policies – as part of allowing choice for all and profitability for the private sector. The notion that “government bad; private good” is not only wrong it’s silly and unhelpful in the extreme. some things are best done by government and some require government to set standards. It’s NOT socialism, it’s just common sense. Keating got many things right (floating the dollar, starting retirement savings as a universal benefit of employment) but selling CBA was a mistake and has led to the Big 4 being objectional and unaccountable – even, as some say, in a Royal Commission, where grandstanding has overtaken genuine enquiry in some cases.
9.5%…..of gross wages
It was clear from the start of the RC that the line of questioning strongly indicated that the result they wanted was determined before the game was finished with the stage show that was the RC being simply run to garner public support. Sadly Australia has become a Nanny State and whilst I do not condone the bad behavior highlighted by the RC, the over regulated environment that is likely to follow will only drive up the cost of advice further and in practicality do nothing to protect or enhance advice outcomes for clients. Welcome to the new Soviet Union of Australia!
Exactly. The case studies may be true but they are extreme examples, not typical behaviour. Yet in the hands of media organisations which have abandoned their former standards of journalistic integrity, they are being conveyed as a crisis deserving panic, outrage, and draconian response.
Insurance premiums have already risen due to media misrepresentation pushing insurers to cave in and pay dubious claims. Loan options have tightened significantly due to the media portraying over leveraged property speculators as “victims”.
But this is just the start. Australian consumers are likely to be hit with huge increases in costs and loss of services, thanks to a kneejerk political response to sensationalised reporting of extreme RC case studies.
Glad someone is saying the truth that you won’t read in the Fairfax media
At last. Someone has said in public what we have all seen.
This is entirely obvious in Rowena Orr’s strategic and leading questioning of the FSC’s Sally Loane in regard to the purpose of the payment of Life Insurance commissions to advisers.
Rowena Orr well knows what the commission payments to advisers for the provision of advice and strategy are for, but the agenda is to discredit the receipt of being paid for the advice.
Sally Loane’s deplorable and negligent reply to Rowena Orr’s questioning is also driven by the FSC’s agenda to wipe out Life Insurance commissions and subsequently advisers to satisfy the profit driven direct insurance models of the FSC Life Insurer membership.
Yep… and I guarantee that insurance premiums wouldn’t drop 1 cent either… so the question is… does the client pay the 1500 advice fee when their application gets rejected by u/w? I think Ms Orr has no idea of this industry… would she work for nothing?
Its like watching a bad movie – highlight all the retail fund bad behavior and look the other way at the industry funds. You can’t tell me if they had a look at the industry funds they would find case after case of industry funds not looking after their clients we are already seeing TAL underwriter of Australian supers insurance getting a flogging and that is on Australian supers fault not TALs. Australian super put how much they want to spend and then the insurance companies say this is what we can offer for that price. the biggest issue is the charging fee’s for no services sorry Intra fund advice! They are a bunch of gangsters these industry funds are forcing people into funds without choice and then spending millions on trying to stop free trade and breaking sole purpose test rules and saying that the can’t compete if they don’t pay for tennis matches and lunches for their employers. The lawyers and Mr silk having a good laugh as like it all doesn’t matter and then allowing him keep touting performance returns by masking asset classes.
Check this report from PWC 2015 talking about the masking of returns and how they get away with it, good read and understanding. This is the stuff the RC should be focusing on!
https://www.pwc.com.au/consulting/assets/publications/comparing-super-funds-15.pdf
Can’t wait to see the currency risk these Industry Funds are carrying. What with all these global unlisted infrastructure plays.
Let’s see how that unwinds 5-10 years from now….
The pwc article clearly brings into question why SuperRatings are deemed to be the source of truth for return comparisons. Clearly if they were a trustworthy source they would have addressed these issues. Instead they have decided to be complicit in the industry funds distortion of return comparisons. This is not just a serious issue for the increased risk in default super accounts but the return premiums due to the higher risk are used as the main argument against the need for more governance. Why do we have to wait for the next market correction for this behaviour to be exposed ? Hayne has instead provided a significant strategic marketing opportunity to industry funds by failing to raise these issues and is therefore also complicit and should be held accountable.
100% agree. Clear political agenda is rife throughout the entire proceedings, especially the farce questioning of the ISA, and faulty assumption they have less issues than the banks to face.
Don’t get me wrong, we don’t like the banks either, but what use is an exercise to clean things up if they only apply the flame thrower to the rats nest on one side of the street only? Just makes the other scum rats proliferate, unless of course that was the political agenda behind this.
We alone submitted a paper into a specific case of several ISA funds not paying insurance claims, getting transactions completely wrong, telemarketers giving advice over the phone to roll over other super, plus referring to several prior reports from other third party organisations that provide proof around fee gouging, not disclosing fees, kickbacks, vertical integration all the way through to hiring union run construction companies at hugely inflated costs, and all for nothing to come of it.
Maybe we need an inquiry into this pathetic inquiry, but of course with Labor likely winning the next election, that is not likely to occur.
cleverly the banks shifted the RC from BANKING to financial planning.. insurance.. commissions.. and everything else not BANKING..etc..etc.. Just keep screwing the small guys as part of this elaborate Scam.. oh sorry. Independent Royal Commission!?
Agree. You would think that Labor had drafted the terms of reference for the RC not the Libs.
this article is only dealing with banking issues, the real problem with banks (and there does need to be more competition) is that they think they can do anything they want with impunity. the damage they have done to and presided over withing the life and financial planning industry cannot be overstated. their market share at any cost philosophy is what has (IMHO) led us to where we are today. lets hope sane heads preside over the next stage of reform, and we don’t have more baby out with the bathwater activity.
Yeah well ASIC can’t even regulate 4 banks, what makes you think they can regulate another 10 new bank competitors?