The federal election that delivered a tiny majority to the coalition in parliament may have deferred the certain Royal Commission into Banking and Finance that Labor had promised, but it seems the industry is still certain to face strong scrutiny post-election.
In defeat and from opposition Bill Shorten has renewed calls for a Royal Commission, a push that Treasurer Scott Morrison has branded a “populist whinge” that would undermine financial industry’s confidence.
Not surprisingly, battling for the no-Royal Commission side, the Chief executive of the Australian Bankers Association, Steven Munchenberg has also lent his voice in a recent op-ed to reassure the punters that they don’t need “Labor’s” Royal Commission, as the Banks are already takings steps to lift their game such as:
- Conducting an independent review of payments and commissions to bank staff and to third parties,
- Setting up a last resort compensation scheme to make sure people who have been given bad financial advice can get their money back, even if their adviser has gone broke or disappeared,
- Promising to appoint a customer advocate for retail and small business customers to make sure any complaints are dealt with promptly. (Hopefully more than one per bank? – Ed)
- And ponying up an additional $121 million to ASIC to boost its regulation of the banks and industry.
Despite this and like-minded defences, there are still calls for a Royal Commission and as the Opposition financial services spokeswoman, Katy Gallagher said “this isn’t something that’s going to disappear.”
Whether you believe a Royal Commission is pertinent or not, calling it a “populist” whinge itself signifies the problem for financial advisers. “Populist”, in this context denotes that regardless of its merits, an RC would be a popular decision (with the public). This implies there is still a mountain of work to do for industry participants to restore the perception of the industry to a positive one in the minds of the public.
The politicians will do their thing, the big banks will do theirs, but as individuals, advisers can also do their bit to provide industry led change and help avoid overt regulation.
Taking advantage of independent sites like Adviser Ratings, and using tools such as our vouching function – which allows you to promote your colleagues whom you know to be diligent and professional is just one example.
In embracing the transparency the site provides, and promoting themselves via the independent validation of their client reviews, individual advisers can help start to change the industry’s perception and take back some agency in the debate in which, so far, they regrettably have had a limited voice.
by Rodney Lester, Adviser Ratings