Clockwise from top left: Kenneth Hayne, Jack Regan, Marianne Perkovic and Ian Silk

Having been privileged to sit in the courtroom and adjacent media antechamber for much of the testimony of the Hayne royal commission – and seen first-hand the seismic admissions of guilt and greed – the final report itself in February 2019 was initially underwhelming.

In fact, I went on telly that night to criticise Hayne and his team, declaiming that “bank spin doctors would be popping the champagne” over the report.

It still rings true that the 76 recommendations were lacklustre compared to the fireworks of the evidence provided. But five years on, it is equally true that the inquiry has left a lasting legacy, at least within the industry if not within the public discourse.

While many within the financial services industry – especially those most commercially affected – bristle at these reminders and want to keep the conversation forward-looking, we believe there are key lessons that are at risk of being forgotten and which, left unheeded, could result in another disaster. Here are our top five.

  1. The news cycle and Canberra circus can move quicker than the market

Asked how regular voters now feel about the royal commission, Minister for Financial Services Stephen Jones told the Investment Magazine Chair Forum last week it was a “distant memory for many”.

The banks themselves were quick to announce their exit from the market, all at once looking as though they were responding to “community expectations” while also freeing themselves of the regulatory regime their misdeeds would trigger. While they are – to varying extents – still exposed to wealth management in reality, the public and political perception is that the Wexit was swift and severe.

They then went on to enjoy immense public and mainstream media praise (perhaps justified) shortly thereafter during the so-called Team Australia relief measures during the worst of the Covid-19 pandemic (though successive interest rate rises may have dented this goodwill).

Either way, the banks themselves expertly responded and then fled the scene. Meanwhile, the financial advice and life insurance industries were left to try and navigate the waves of often duplicated rules and regulations that would follow.

Listed wealth manager share prices continue to act as a crude commercial barometer, with AMP and Insignia each down by more than 55 per cent over the five years since the reckoning. The moral of the story is that, while voters and the news cycle may seemingly move on quickly, the institutional memory of the market is not always so fickle.

  1. Be sceptical of external advice

The commission rightly focused on regulated entities – the financial services providers with whom consumers actually engaged. They are the entities that hold fiduciary or contractual duties and should therefore be held accountable for their own behaviour.