Royal Commission flags fees and regulatory failings in report

2 October 2018
| By Hannah |
image
image
expand image

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has highlighted a toxic sales culture and a failure to regulate wrongdoing as major issues in the interim report handed down by Commissioner Kenneth Hayne.

The report flagged issues with fees charged for little or no service provided as deeply problematic, including questioning how it reached a point where fees were charged to deceased people.

"Too often, the answer seems to be greed - the pursuit of short-term profit at the expense of basic standards of honesty," Hayne wrote in the report. "How else is charging continuing advice fees to the dead to be explained?"

Hayne said that a culture clearly existed where profits were put first and staff performance at every level was based on sales and profit.

The report also suggested that regulators had failed to act sufficiently to sanction wrongdoers.

"When misconduct was revealed, it either went unpunished or the consequences did not meet the seriousness of what had been done," Hayne wrote.

He found that while laws already existed prohibiting much of the problematic behaviour, most especially in requirements that Australian Financial Services Licensees provide services "efficiently, honestly, and fairly", the answer to reform may not lie in extensive regulatory change but rather simplification of laws and better enforcement.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year ago
Kevin Gorman

Super director remuneration ...

1 year ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year ago

The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation ...

6 hours 2 minutes ago

Super funds had a “tremendous month” in November, according to new data....

4 days 5 hours ago

Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion....

4 days 10 hours ago