The ANZ Banking Group has admitted elements of failure in its dealings with Opes Prime and Storm Financial at the same time as calling for the greater professionalisation of the financial planning industry.
In a submission to the Joint Parliamentary Committee on Corporations and Financial Services, the banking group acknowledged deficiencies in the management of its equities finance business and its relationship with Opes Prime and a breach of its credit policies with respect to lending to some Storm customers.
However, the banking group’s submission focused in large part on seeking to establish a more viable environment for the financial planning industry and states that many of the current concerns about the financial planning industry could be addressed “by the further professionalisation of the sector”.
It said this could be achieved by the establishment of a professional body that would set entry standards relating to the qualification, education, planner registration and management of claims of misconduct and reporting by the Australian Securities and Investments Commission.
The banking group said it was also supportive of the industry transitioning to fee for service in the provision of holistic financial advice and removing commissions.
It said the obligation of financial planners to put clients’ interests first should be legislatively enshrined in order to formally establish that financial advisers owe fiduciary duties to their clients.
“It is important to take into account that the further professionalisation of the planning industry and reform of remuneration for planners offering full advice may increasingly put the cost of full advice out of reach of those with small sums to invest or who have simple investment needs,” the submission said.
“Consideration will also need to be given to how those who are unwilling or unable to afford this advice will be served,” it said.
“To be able to provide basic financial advice and services to consumers who do not need relatively higher cost financial advice from a financial planner, ANZ has been exploring solutions for these consumers through the provision of basic investment products that are straightforward to understand and supported by simple advice,” the submission said.
