Royal Commission Round-Up
2018 was a seismic year for the wealth industry, with Kenneth Hayne and the Royal Commission exposing the sorry state of affairs in corporate Australia. The Royal Commission saw it all, from fees for no service to selling worthless insurance products to the most vulnerable members of society. And who can forget charging life insurance premiums and advice fees to dead people!
The bank CEOs strolled into the Royal Commission with the same old mea culpas and promises of change that we’ve heard over and over again. Commissioner Hayne’s interim report surprised many, calling for stricter enforcement of existing laws rather than proposing new regulations. Time and time again, the regulators were found to be sleeping at the wheel.
In a promising sign, the regulators have taken to Hayne’s recommendations, with the Australian Prudential Regulation Authority dropping the hammer on IOOF (Australia’s largest non-bank adviser group) last week after years of dawdling. APRA also announced that they would be cracking down on poor performing super funds during the week. Hopefully this is a sign that our regulators will use the Royal Commission as a mandate to tidy up the financial services industry.
The service of providing quality financial advice is indeed a noble one, however our industry has been bastardised by several rotten eggs and perverse business models. When Stanford Brown provides investment advice we do not receive commissions, and we have a full time compliance officer to ensure that our practices are in line with not only the letter of the law, but the spirit of the law also. Our industry is overdue for radical change, and Stanford Brown welcomes this development.