Canberra, Australia: Sweeping change is expected in the Australian financial sector as lawmakers agree to act on all 76 recommendations made by commissioner Kenneth Haye on Monday.
The consideration comes following the conclusion of the 13-month inquiry by the Royal Commission into Misconduct in the Banking, Superannuation (Pension) and Financial Services Industry.
The purpose of the inquiry was to explore the extent of misconduct in the relevant industries as well as present recommendations for the necessary legal reforms in those areas. The misconduct was related to evidence that exposed practices linked to numerous practices, like mysterious fees being administered where no services were being performed.
In the Final Report, issued on Friday, the royal commission concluded “the root cause of the fees for no service conduct was greed.” Haye made several recommendations to update and strengthen the power of the Australian Securities and Investments Commission (ASIC) and Australian Prudential Regulation Authority (APRA), whose efforts to sanction misconduct were found to be severely lacking.
The commission was responsible for exposing many questionable practices such as billing the dead for financial advice, and giving “priority to the pursuit of profit over the interests of customers and above compliance with the law.”
Haye suggested amending the Australian Banking Code, to ensure banks will work with customers who live in remote areas and those who have limited English proficiency. Additionally, it was suggested to provide more protections to customers by eliminating automatically renewing fees for financial advice and to establish a new oversight body to evaluate the effectiveness of ASIC and APRA.
After presenting a detailed list of exhibits and case studies that evidence civil and criminal wrongdoing, the report invites ASIC “to consider whether criminal or other legal proceedings should be instituted in respect of [the discovered] conduct,” but stopped short of predicting the outcomes of such investigations.