Most advisers believe the Royal Commission into Misconduct into the Banking, Superannuation and Financial Services Industry failed to address the most relevant issues in the financial advice sector, a Professional Planner online poll has found.
The survey, which asked, “Did the royal commission inquiry into financial advice uncover the most important issues in the industry?”, revealed just over 70 per cent of advisers felt the inquiry squandered an opportunity to target key areas.
Despite the well-publicised grilling of the big banks and AMP at the inquiry, Matthew Kidd, chief commercial officer at Omniwealth, says advisers are still looking for the institutional side to be held to account.
“There would be advisers who have had enough of the larger institutions getting away with extremely dubious practices over the years, even though whistleblowers have been loud and clear that there have been serious compliance breaches over this time,” Kidd says.
The commission’s failing, Kidd argues, is that the large players aren’t scrutinised or punished the way smaller entities often are.
“There may be a feeling that these institutions have not been held to account, or investigated, in a way that smaller institutions may have been had they committed the same breaches,” Kidd explains. “Therefore, there may be a school of thought that the royal commission could have dug a bit deeper into the breaches the whistleblowers came forward about, as it would seem to be a deep cultural problem that was well known in the industry.”
Kidd does acknowledge, however, that the reach of the inquiry is limited.
“The commission has to cover banking, financial advice, licensing, insurance, etc, so there is a limit to how deep they can go,” he admits. “That’s the reality of any royal commission.”
Jim Stackpool, managing director of Certainty Advice Group, is part of the minority that thinks the inquiry did target the industry’s problem areas.
“What was missed?” Stackpool asks. “Vertical integration? Nope. Separation of advice from product? Nope.”
He says that while advisers may not think the royal commission uncovered the real issues, the investigators found exactly what they were looking for.
“The assisting counsel knew the issues, knew the guilty parties, knew the detail and the questions to ask and issues to expose,” he says. “Agendas were clearly set.”
Commissioner Kenneth Hayne is scheduled to submit an interim report into findings from the inquiry no later than September 30, and a final report by February 1, 2019.