The major banks would be made to divest their interests in financial planning and financial planners would have to be individually licensed under a policy approach prescribed by the Australian Greens and revealed in a key Parliamentary Committee report.
In additional comments attaching to the House of Representatives fourth Review of the Four Major Banks, Greens committee member Adam Bandt said his party’s policy approach would require banks to divest themselves of financial advisory and brokerage services, such as CommSec and Nabtrade.
“The Greens would also ensure that the wealth management companies that the banks are selling are split so that superannuation is separated from product issuance and financial planning,” his commentary to the committee’s report said. “A failure to do so would still leave an inherent conflict of interest within essential service providers.”
“Within the remaining complex and selective components of the finance industry, separation would be primarily on the basis of whether products are retail grade or investment grade, and whether customers are retail investors or sophisticated investors, as it currently is.”
The Greens would introduce a range of measures to increase protections for retail consumers including:
- Financial planners will have to establish an industry-wide indemnity scheme;
- Financial planners will have to be individually licenced and need to be owned and operated separate from any product issuance firms if they are to call themselves a financial planner;
- Mortgage brokers will need to be owned and operated separate from any lending institution; and
- Financial planners and mortgage brokers will no longer be able to receive commission-based sales.
Westpac:
It would have to divest its wealth management arm, BT Financial Group, and break-up superannuation, insurance and wealth management.
ANZ, CBA and NAB:
ANZ, CBA and NAB are on the way to divesting their wealth management arms. But they will be compelled to finish the job and also have to divest their trading platforms.
Macquarie Bank:
It will no longer be able to operate as a retail bank (ADI) and investment bank.
AMP:
It will have to break-up. Currently it is an ADI, as well as offering superannuation, insurance and wealth management. It will need to choose one area to operate in.
MLC:
Currently owned by NAB, but is being sold off. In addition to this it will have to break up superannuation, insurance and wealth management.
OnePath:
Currently owned by ANZ, but is being sold off. In addition to this it will have to break up superannuation, general insurance and wealth management.
