Firms need to prepare evidence early for Royal Commission
Financial services firms who are nervous about the Royal Commission into misconduct in the banking, superannuation and financial services industry need to prepare evidence early and consider their policies and procedures, Hall & Wilcox has advised.
The law firm said that financial services providers would need to plan early for the Commission, especially regarding evidence. They warned that there would be significant time pressure on firms asked to produce evidence, with high penalties for failing to produce evidence and limited recourse for time extension.
Hall & Wilcox, which has been involved in many Royal Commissions, suggested that some firms may even benefit from preparing and offering information before receiving a summons.
“Will you await a summons, or prepare information and go on the front foot? It’s important to remember firms won’t be penalised for volunteering information,” the firm said. “It’s not too late to act: firms which are open, honest and willing to right a wrong can come out the others side in better shape – in face, the worst thing is to hide and cover up.”
The law firm further advised that financial services businesses act now to review or update their policies and procedures, particularly on areas of focus such as remuneration and complaints.
They recommended looking at complaint registers and determining whether there are common themes of complaint and how quickly and well they are responded to.
Hall & Wilcox also highlighted potential conflicts of interest as an area that financial service firms need to be aware of, as there may be multiple conflicts within one organisation.
“Areas which may demand further scrutiny include parts of the business where a head of department has a high achieving team, which may not be meeting best practice, or community standards or expectations,” Hall & Wilcox cautioned.
Finally, the law firm recommended that financial services providers prepare for the cost of participating in the Royal Commission. They said that there may be some potential to recoup the expenses, either through insurance or the government.
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