Hayne nails who got most from fees for no service

The Australian Securities and Investments Commission (ASIC) has acknowledged that serious matters have been referred to it by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and said they will be dealt with as a priority.

The chair of ASIC, James Shipton used a statement reacting to the Royal Commission findings to state, however, that it would not be commenting on actual or potential investigations.

The regulator also acknowledged the Royal Commission’s strong criticism of its past performance and claimed this accorded with its “change agenda” which included the adoption of a “why not litigate” enforcement stance.

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The Royal Commission stopped short of specifically naming executives, but the Commissioner, Kenneth Hayne, made clear in its final report that he believed serious charges should flow from conduct within the banks and AMP Limited around fees for no service.

Hayne noted that until the Royal Commission was established, “ASIC and the relevant entities approached the fees for no service conduct as if it called, at most, for the entity to repay what it had taken, together with some compensation for the client not having had the use of the money”.

“That is, the conduct was treated as if it was no more than a series of inadvertent slips brought about by some want of care in record keeping. It is necessary to keep steadily in mind that entities took money (a lot of money) from their customers for nothing. The conduct was so widespread that seeing it as no more than careless must be challenged,” the Commissioner said.

Hayne also signalled that the fee for no service issue extended to companies which had not appeared before the Royal Commission and stated: “there is a real question whether, contrary to section 1041G of the Corporations Act, the licensee, in the course of carrying on a financial services business in this jurisdiction, engaged in dishonest conduct in relation to a financial product or financial service. Section 1311(1) of the Corporations Act makes that contravention an offence”.

“There is no doubt that money was taken from clients. Nor is there any basis for doubting that, when taken, the taker did not intend to return it to the client. If there was no adviser linked to the client, the money taken was applied by the taker to its own use. (I say the money was applied by the taker to its own use on the basis that the total of the amounts deducted exceeded the total amount paid out to advisers. The excess was constituted by the fees charged but not remitted.)

“If the client had died and the taker had been told and had recorded that the client had died, there could be no ongoing service given and the taker’s records showed that there could be none given. I consider that it is open to a jury to conclude, beyond reasonable doubt, that, in either of the cases described, the taker, in the course of its carrying on a financial services business in this jurisdiction engaged in conduct in relation to a financial service that was dishonest according to the standards of ordinary people and that the conduct was known by the taker to be dishonest according to the standards of ordinary people.”

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Very clear statement of receiving money through dishonest means by Hayne.

I wonder how much the banks paid Hayne to remove their competition whilst allowing their vertical integration which was largely the reason for the RC in the first place. What a joke. He talks about conflicted remuneration yet has clearly been bought off by the banks and instructed by them to remove insurance advisers and mortgage brokers who are able to offer customers choice of products and client protections when something goes wrong.

What an idiotic statement. The banks were strongly opposed to the holding of a Royal Commission and for good reasons given what has come out by this Royal Commission.

Hayne understood that the mortgage brokers were working for the banks and not for the customers. They were really mortgagor brokers or bank touts. They were choosing products that gave them the best commissions for themselves and not the best deal for the mortgagees.

From freedom of information release the banks sent a draft letter requesting terms to be covered and for commission to be short. The recommendations of royal commission is the biggest attempted theft and misinformation to ensure a reduction in competition and to drive consumer to banks and insurance providers eliminating competition. The Australian public is too stupid to understand this and the implications of these changes. Our representative the FPA have not acted in the interests of financial planners and instead have been focusing on self interest at the expense of their members. All Financial Planners / Insurance Agents need to unite and united can have influence. Firstly cancel your FPA membership. The FPA does not work for the financial planning industry and is more absorbed in its own self wealth. Why support such an ineffective so called representative body . Save your money. Use it to help yourselves. Lobby your local members. We have elections coming up. Stop fighting among yourselves and unite and form an alternative representative body promoting financial planning interests. This is your last chance financial planners before it is too late. Only united we can survive and portray an image of strength and be taken seriously. For the sake of Financial Planners, your clients, your business and your financial well being and future do something before it is to late. The time is now.
The cost of inaction is your extinction and your future. Remember it is not too late. Lobby your members of parliament, educate your client to the benefits of financial planning so they will be your advocates and educate the general public.Speak to fellow planners and work on strategy and campaigning. Your industry is at risk
Only united can we save the industry. All financial planners work together do not be divided by things like bank planners, industry planners, independent planners. Divided we fall. It is in your hands. Save your selves!!! Your future is in your own hands. Do not let your future be dictated by others.
There is no time to waste. Do it now

Save your energy. Given the infantile responses by posters to the Royal Commission findings of grandfathered commissions, fees for no service, conflicted commissions, ineffective insurance, corruption by advisors, and more, then there is no hope of an independent and professional financial advisors.

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