The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was announced on 30 November 2017, and we have been following it closely ever since. Click here to read our earlier blog post on the Commission.
On Monday, 4 February 2019, the long-awaited final report was released. The report follows Commissioner Kenneth Hayne’s calls for ‘change’ in the financial services industry.
The recommendations made in the final report have focused on ending the unsolicited sale of financial products, banning conflicted remuneration earned by intermediaries, and the better enforcement of legal standards.
Some of the key recommendations include:
Banks:
- An expansion of the Banking Executive Accountability Regime laws to track those responsible for any breach of lending laws
- The imposition of fines on mortgage brokers who fail to act in the best interests of an intending borrower
For farmers and those with poor English skills:
- The establishment of a national scheme to mediate farm debts
- A ban on banks from charging default interest on loans secured by farm land in an area declared to be in draught or subject to other natural disasters
- Amendments to the banking code of conduct, so that people in remote areas, or those with poor English skills, can access and conduct banking
Financial Advice:
- The creation of a new disciplinary system for financial advisors which requires all advisers to be registered, and the creation of a single disciplinary body to oversee this system
- All banking licence holders be required to report ‘serious compliance concerns’ about individual advisors to ASIC on a quarterly basis
Superannuation:
- A single default super fund be applied for all workers
- Heavy-handed selling of superannuation should be abolished
Insurance:
- The banning of the heavy-handed selling of insurance
- Funeral expense insurance policies should be defined as a ‘financial product’, bringing it under the oversight of ASIC
For those affected by the finance sector:
- A compensation scheme should be established for those unable to receive financial recompense from their institution
After the report?
Justice Hayne has referred major companies, including Suncorp, ANZ, NAB, Allianz and ClearView, to regulators for possible criminal or civil action. It is the intention that through an increased scrutiny of these major financial service providers, consumers will be better protected against misconduct.
If you have been a victim of a financial service’s misconduct, or have any queries relating to issues featured in this article, please do not hesitate to contact us on 02 8917 8700 or fill out the enquiry box and we will get back to you ASAP.