“Saying sorry and promising not to do it again has not prevented recurrence. The time has come to decide what is to be done in response to what has happened.” “The financial services industry is too important to the economy of the nation to allow what has happened in the past to continue or to happen again.”
– Justice Hayne
Hayne gave 76 recommendations in total, but we will just summarise the key points for you.
- Mortgage brokers are to act in the best interests of the intending borrower, not the bank providing the loan
- Borrowers rather than lenders should pay the mortgage broker for their services
- Lenders would be banned from paying trail commissions to mortgage brokers for new loans
- Create a new disciplinary system for financial advisers, with all advisers required to be registered
- All banking licence holders be required to report “serious compliance concerns” about individual financial advisers to ASIC on a quarterly basis
- Ban on advice fees deducted from MySuper accounts
- Advice fees for non-MySuper accounts would be prohibited in most cases
- Justice Hayne has referred to regulators a long list of companies for possible criminal or civil action. The 24 companies include Suncorp, ANZ, NAB, CommInsure, Allianz, AMP and ClearView
- Retain ASIC and APRA but have them overseen by a new independent authority that would assess the two regulators to ensure they are carrying out their responsibilities
- ASIC overhauls its approach to enforcement, with a focus on court action rather than infringement notices
- ASIC should continue its annual reporting of breaches of financial service regulations but in future name the companies rather than just the type of breach
If you’re unsure of anything discussed in this summary of the Australian Banking Royal Commission findings, or of what you’ve heard in the news, please contact your Ashfords advisor!