After 68 days of hearings, 130 witnesses and more than 10,000 public submissions, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, led by Kenneth Hayne QC, wrapped up last week with the final report being published online on Monday.
Wrapping up the extensive public inquiry after more than 12 months, Commissioner Hayne slammed the financial sector in Australia for putting profit before the needs of customers.
“Rewarding misconduct is wrong,” Hayne wrote in the report. “Yet incentive, bonus and commission schemes throughout the financial services industry have measured sales and profit, but not compliance with the law and proper standards. Incentives have been offered, and rewards have been paid, regardless of whether the sale was made, or profit derived, in accordance with law. Rewards have been paid regardless of whether the person rewarded should have done what they did.”
A total of 76 recommendations were made by Hayne – with the government confirming it intends to act on all of them – along with 24 referrals to regulators for civil or criminal charges. Here are the key recommendations which may impact older Australians:
Many older Australians rely on financial advice to help them navigate the difficult transition from working life to retirement and ensure they are getting the most out of their savings, shares or investments to allow them to live the way they’d like. But Hayne said the financial advice industry had “caused financial harm to clients and damaged public confidence in the value of financial advice”, leading him to call for increased transparency when it comes to services provided, as well as a clampdown on fees-for-no-service.
Some of the key recommendations concerning financial advice include:
Many times of insurance are somewhat of a forced purchase, with Australians regularly taking out policies for everything from home and car cover, to travel and life insurance. However, the royal commission shone a light on the lack of regulation in place in the insurance sector compared with other financial services.
However, according to the Australian Financial Review, many of the changes recommended by the commission would depend upon the outcome of a review by ASIC in 2022, allowing the industry time to prepare for the changes.
Some of the key recommendations concerning insurance include:
The banking sector perhaps attracted the most attention throughout the royal commission, with the leaders of the ‘Big Four’ being subjected to intense questioning as part of the hearings process. Writing in his final report, Hayne said: “From today, the banking sector must change and change forever”.
Some of the key recommendations concerning the banking industry include:
Commonwealth Bank, Westpac, NAB and ANZ have since responded to the report’s findings and recommendations.
Hayne’s recommendations around superannuation apply more to those Australians who remain part of the workforce and are not yet accessing their funds as income. However, some older Australians may still be in work and contributing to their super accounts to set aside as much cash as possible in later life, or may administrate their own self-managed super funds.
Some of the key recommendations concerning superannuation include:
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