And that makes three!

Three of Australia’s largest financial institutions have now admitted to wrongdoing and misconduct in financial services – the latest household name to fall from grace, National Australia Bank (NAB).  Never before have Australian’s needed trusted advice more and never before has public perception of the industry been so low.

The NAB revelations are the last straw.

Australia must have a royal commission into the financial advice industry – its vertical structure, recruitment practices, remuneration schemes and compensation decisions. Without one, Australians cannot be expected to trust the so-called experts.

Yet the federal governments response so far has been half hearted at best.

Demanding better education standards is a necessary step, but the government’s planned quid prod quo for refusing a royal commission, the advisers’ register still relies on the honesty of advice firms and therefore the dishonesty of those advisers that are at the root of the problem in the first place.
The register will require banks and other financial institutions to admit breaches and report them to ASIC, which itself struggles to enforce rules and licence conditions, let alone be proactive in background checks for advice applicants and seeking out wrongdoing. Again… it relies heavily on the industry co-operating.

The current system, one based on protecting the vast majority of well-qualified and honest advisers isn’t working; regulation is needed and it must be pro-active and as strong as possible to ensure the client comes first no matter what.

A royal commission is in everyones best interest!