Banking royal commission lacks adviser support

According to the poll, only 13 per cent of the 1,043 respondents would support a royal commission into the banking industry, while 87 per cent of respondents were opposed.

Calls for a royal commission were sparked in March, following reports by Four Corners and Fairfax that alleged the unfair processing of life insurance claims by CommInsure. In April, ALP leader Bill Shorten said there would be a royal commission into Australia’s banking industry if the party was to win the next election.

Advisers and industry associations, on the other hand, are not in favour.

FPA chief executive Dante De Gori told ifa that it would not support any moves in establishing a royal commission if it included financial planning.

“Based on our analysis, there have been 54 instances of reviews, inquiries, submissions and consultations over the past seven years that have been directly and indirectly about financial advice,” Mr De Gori said.

“We’ve had Future of Financial Advice reforms, we have a new ASIC register and we’ve now got on the table a proposal to improve education and professional standards to reform the life insurance sector.

“We are also in the midst of transitioning all financial planners to the Tax Agent Services Act and the Tax Practitioners Board regime.”

AFA president Deborah Kent echoed Mr De Gori’s sentiments, telling ifa the industry hasn’t really seen the true effect of a number of pieces of regulation that have been worked on.

“We need a few years for regulation to have its ability to change the way things are done in advice,” Ms Kent said.

“A royal commission just takes all of that away.

“We would rather see the regulation that’s been introduced and worked on be able to carry through in order to see the changes in the industry and the improvements that it should bring to financial services.”

Those in support of a royal commission, however, include Industry Super Australia (ISA), which said in April that the lack of community trust and confidence in ‘scandal-prone’ banks could infect public confidence in its lines of business in compulsory super.

“A royal commission will have to consider how broadly and deeply unethical conduct exists in [the banks’] vertically integrated businesses, including their involvement in managing hundreds of billions of compulsory super savings on behalf of millions of Australians,” an ISA statement said.

“Given compulsory super is a central piece of Australia’s long-term economic and social policy, on balance, the answer may be to structurally separate banks and super.”

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].