Govt failing to hold exiting institutions to account

Questions were asked over how the big financial institutions that triggered the Hayne Royal Commission have been absolved of any liability, during debate on the Better Advice last week in the Senate.

The Better Advice bill passed last week, which had addressed many of the industry’s biggest issues including the establishment of the single disciplinary body (SBD) and termination of the Financial Adviser Standards and Ethics Authority (FASEA).

Funding of the regulatory bodies of the industry was a sticking point as the Australian Securities and Investments Commission (ASIC) levy would be left to be paid for the remaining advisers who were deemed fit and proper for the industry.

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Labor Senator, Deborah O’Neill, said although the ASIC levy – which charged financial institutions to pay for investigations into the industry – was a good idea, the ones responsible for most of the bad behaviour were no longer around to pay.

“Most of the malfeasance was theirs, but they rapidly existed the market and exempted themselves from the levy,” O’Neill said.

“That left the levy to be paid by the remaining advisers, the decent ones that were still hanging around, lots of them small and medium businesses.

“Subsequently, the costs have been borne by them and have risen exponentially. This year it’s predicted to rise another 30%, and even the most diligent and careful advisers are being billed for it.”

O’Neill said the retreat of the big four banks out of the industry showed they viewed it as unprofitable without vertical integration.

“While I support a more independent network that's more agile and less dependent on big financial institutions, this move only reinforces that many financial institutions no longer see the sector as profitable without a large portion of them selling their in-house product for their profit or without corrupt and exploitative practices that were exposed during the commission,” O’Neill said.

Pauline Hanson, One Nation leader, noted the purpose of the Royal Commission was directed at the banks but the focus instead ended up on the advice sector.

“With this legislation, the government seeks to place more responsibility and liability on financial advisory services, while, under the government's national consumer credit legislation schedule one, the banks would have absolutely no responsibility if the government amendments were to proceed,” Hanson said.

“Is it because the banks make large donations to the major political parties that they are being protected? I'm only thinking out loud.”

The minister for financial services, superannuation and the digital economy, Senator Jane Hume, said: “I thank those senators who have contributed to this debate, although many of those opposite have demonstrated a profound ignorance or wilful disregard of this important industry—crocodile tears and, within the same breath, a call for even more regulation. They have conflated unadvised product failure with financial advice.

“The Morrison government is focused on cutting red tape, cutting regulatory alignment, creating regulatory alignment and reducing costs for financial advisers and financial advice businesses, which is exactly what the industry has called for.”




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Its a disgrace the Banks and AMP have got away with a smack on the wrist and individual advisers are left holding the bill that the banks & AMP created absolutely pathetic.

"the Banks and AMP" didn't actually do anything wrong.
Now, various senior people at those institutions, some of whom appeared at the RC and gave testimony, did a lot wrong.
Most of those senior people (that did a lot wrong) got a big pay-out to leave or they got a promotion.

Well, the Culture of a firm is set at board level. The fish rots from the head as they say. but you are correct. I do remember being a young adviser, that took a big punt and switched from a safe job...took out a mortgage with a pregnant wife...only be told by the middle manager, ( paid based on my performance) if I didn't meet a new FUM target by 80% I would not be working in that Profit for members Super fund 12 months on. I left that firm but it took 2 years to find a job and I was under immense pressure by that manager and his manager above him to get and retain monies in that Super fund. Whilst those types of target are somewhat removed the culture still exists.

“The Morrison government is focused on cutting red tape, cutting regulatory alignment, creating regulatory alignment and reducing costs for financial advisers and financial advice businesses, which is exactly what the industry has called for.”

She is more ignorant than I am capable of fathoming or she is lying through her teeth.

I cannot believe Hume has the arrogance to think this let alone say it in public.

That quote from Hume is astonishing. Something is not right upstairs.

She is a politician right? So why ask whether or not she is lying? Were her her lips moving? There's your answer.

Lies, Lies and more Lies.
I think the LNP, Frydenberg, O'Dwyer & Hume's approach to Advisers is that if they keep telling the same lies over and over again that they might even believe it themselves.
And they hope that Advisers will believe it too.
It is so far beyond acceptable and Advisers need to help vote these clowns out.

I can't believe that I agree with Pauline Hanson!

Could not have said it any better. Not that I am a big fan but she absolutely nailed this one.
Pauline Hanson, “One Nation leader, noted the purpose of the Royal Commission was directed at the banks but the focus instead ended up on the advice sector.”

That last sentence is breathtakingly false. How stupid is this coalition government? Financial advisers were their secret weapon. Now we are flat out lobbying against them, en masse. While there are other issues, I have no doubt the recent poor polls have been significantly affected by financial planners. This is like shorten with the franking credits. Brain dead politics, failing to listen and recognise the anger, and turning rusted on supporters against them.

Yes good point Minister Frydenburg and Minister Hue are very very out of touch

What a load of absolute BS, the lies, lies and utter BS lies that sprout out of this LNP Govt are disgraceful.
“The Morrison government is focused on cutting red tape, cutting regulatory alignment, creating regulatory alignment and reducing costs for financial advisers and financial advice businesses, which is exactly what the industry has called for.”
OUT WITH THIS LNP MOB THAT HAVE BEEN DRIVEN TO MASS ADVISER OVER REGULATION VIA FRYDENBERG.
Out with Frydenberg
Out with Hume
NOW !!!!

"'They have conflated unadvised product failure with financial advice.'' - this is just a flat lie. Otherwise why are the banks remediating billions for fees for no service on Financial advice - absolutely nothing to do with their products. At some point something has to give with this government and the lies regarding financial advice, the damage continues - DDO etc.

I think that comment was in relation to Senator Pratts' comments conflating the collapse of Stirling New Life, with Financial Advice.

You can read the comments here:
https://www.aph.gov.au/Parliamentary_Business/Hansard/Hansard_Display?bi...

Once you have read that you get the impression that most commenting still have no idea about the Financial Planning industry.

thanks I'll read it properly

It's a sad reflection on the government when their minister gets in a debate with Pauline Hanson, that Pauline easily wins with a superior display of intelligence, honesty, and common sense.

Hume must go, or the government must go.

We all have a voice at the next election. The fish rots from the head and it's time to replace it. There is now a real opportunity for a reset. Get on with the next election.

Advisers are being driving out due to regulatory red tape.... In the meantime, due to the high costs of advice you have the FSC releasing a white paper recommending making it easier to obtain advice from their "online tools" recommending expanding other channels "to compliment" advice and the expansion of intrafund advice. (FPA supports this)....seems like when it comes to advice these insto's are having a time out and will be back to fill the gap.

She like most pollies these days is 100% focussed on being seen to say the right things, even in the face of facts that are at polar opposites of reality...with the sole focus being to get re-elected. populist politics is out of control and we are in suffrage...she may even mean well but i doubt Hume knows much about the REAL issues advisers are struggling with at the coal face

Pauline Hanson nailed it when she said that " the Royal Commission was directed at the banks but the focus instead ended up on the advice sector."
It was such a con that significant bad behaviour from banks (such as out of cycle interest rate movements, credit card charges, exchange rate rip-offs) was not looked into.

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