Royal Commission

Ongoing coverage and expert comment on the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

Royal Commission

‘Money for jam days are over’: Ripoll

The ex-Labor MP lamented that despite efforts to kill commissions, “the opposite happened”. FoFA 2.0 is coming on the heels of the royal commission, he says, and an end to “rubbish”.
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Managed account conflicts of interest divide industry

Hayne’s benign take on the separation of product and advice left the door open for conflicts of interest in managed accounts to continue. Not everyone is convinced that this is a problem.
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‘Opex exemption’ loophole could remain open

Xplan subscription fees and sponsorship at conferences are among the common examples of opex payments product providers make to licensees, which may continue despite Hayne’s crackdown.
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Crackdown on grandfathering, fees to feed billions into super

Hayne’s recommendation to end pre-FoFA commissions and fees-for-no-service could generate $3.7 billion in remediation and send $1.1 billion a year flowing back into super balances.
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Hayne throws doubt over AMP BoLRs

The Commissioner's view that client fees shouldn’t be seen as a tradable asset by advisers and wealth firms appears to undermine the BoLR-style of agreement.
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Hayne ignites adviser discipline bonfire

The commissioner’s proposed new disciplinary body could either make ASIC’s incoming code-monitoring bodies redundant or grant them much stronger powers over advisers.
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Hayne orders about-face on OSAs

The commissioner has recommended that service contracts be delivered annually, and be much more focused on the value of the future service to be delivered.
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‘This cannot continue’: Hayne dresses down advice

Institutions will continue to own advice businesses but their models will be tested as new expectations for disclosure and service agreements emerge in a heavily regulated environment.
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Super fund bosses to get BEAR treatment

The Commissioner said fund trustees and insurers should be accountable in the same way bank bosses are under the BEAR.
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Hayne backs ‘one default account’ for new members

A single "default" super account should be mandated for Aussie workers according to Commissioner Kenneth Hayne.
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Hayne forces trustees to lift game

Trustees will be forced to lift their game and their roles will be restricted to avoid conflict under Hayne's recommendations.
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Client file ‘look back’ requests: no end in sight

Requests for client files prompted by ASIC programs and surveillance have become so onerous they’re strangling some advice businesses. The situation is likely to get worse this year, not better.
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Record number of boards could face spills over pay

The regulator’s annual study highlights just how disaffected shareholders are, with a record number of ‘no’ strikes on remuneration putting the heat on directors to curb executive salaries.
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Finance jobs down but there is a silver lining

A new report from Sunsuper has highlighted the effect of the royal commission on hiring in financial services but there could be hope for a rebound on the way.
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Time for advisers to pay up for licensees

The evolution of licensees is happening, in part, because advisers are starting to think about certain services as an investment rather than a cost.
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Advice fee models will change

Ongoing fee arrangements, asset-based fees and incentive structures are set to be shaken up based on the findings of the Hayne royal commission.
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Banks aren’t leaving wealth due to lack of profitability

A PwC report reveals that institutionally owned wealth management businesses were still incredibly profitable in the lead-up to divestment in 2018.
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Fund flows reflect royal commission backlash

Institutions that suffered the most reputational damage during the Hayne inquiry also suffered the biggest outflows from their platforms in the September quarter, data from Strategic Insight shows.
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2018: a defining year for advice

From regulation, to oversight, to education standards and beyond - 2018 will go down in history as a significant year in the lives of advisers, executives and business owners in the wealth management industry.
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Advisers push industry funds to open up

Regulators and policymakers are investigating vertical integration and that probably has industry funds looking closely at their advice models.
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Fear and self-doubt warping advice: Innova CIO

Advisers are losing confidence in their investment savvy and choosing cheap options at the expense of real value, Dan Miles says.
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‘You’ve got to get off the 1 per cent’: Stackpool

One of the industry’s most known figures has spoken out about what he calls outdated remuneration models. Charge clients for value, he says, and nothing more.
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Vigilant practices can buck the low-valuation trend

Creating robust risk management and continuous compliance cultures and systems is how advice practices can maintain and increase their value, even as other firms sell at a discount.
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Advisers not pre-empting commissions ban

While the big banks have committed to getting rid of grandfathered commissions, a Professional Planner poll shows the broader market is reluctant to follow them. Tahn Sharpe writes.
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Investigating the real cost of admin: one fundie’s mission

By shedding light on hidden admin fees, one prominent fund manager is hoping to quicken cultural the change he believes is necessary for the industry to advance.
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Boards need to be engaged on culture: Costello

“From the outside it looks as if you had strong management that controlled the corporation and the audit committee was not involved.” – Peter Costello on CBA’s failings.
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Sanders on FASEA, Hayne and ‘the bones of capitalism’

The former chief of the standards body says he wanted to do more than just make the rules. Speaking at Deloitte, he expressed clear ideas about what the industry needs.
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Top 10 reasons real reform won’t happen

Politicians rarely maintain their appetite for significant change under ferocious lobbying. Here are the arguments most commonly used to give them pause, Robert M.C. Brown writes.
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Dealing with clients addicted to income

Max Newnham shares his tips for advising clients whose misconceptions have them clinging to residential property, listed equities or guaranteed bank deposits.
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Bank execs admit to wealth experiment’s failure

NAB boss Andrew Thorburn followed his counterparts in admitting the big four’s foray into advice was both ill-conceived and poorly executed. Tahn Sharpe writes.
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Chris Bowen on reform: ‘I’ve been around the track’

Chris Bowen will listen but he's been 'around the track', as he puts it, enough times not to allow a lobby fuelled solely by self-interests to sway him.
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Membership growth front of mind for new FPA chair Broome

The association has been focusing on building its younger membership base in recent years, at a time when many older advisers are looking for the exit.
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Comyn probe reveals Hayne’s overseas focus

CBA’s Matt Comyn kicked off round seven of the Hayne royal commission hearings, which will feature leaders of the country's largest financial institutions.
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Self-licensing trend spawns licensee support businesses

ClearView’s LaVista is the latest entry in dealer-to-dealer services, as institutions hedge their bets on future business models by partnering with firms wanting to go it alone.
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Who really owns the client?

It’s one of the most vexed questions in wealth management but its something more advisers will need to consider. Ultimately, it may come down to ethics. Tahn Sharpe writes.
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US professor tells Hayne how to fix advice conflicts

The commissioner reached out to Sunita Sah for help on dealing with advice conflicts; she told him disclosure won’t work and neither will education or penalties.
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Time to stop the diversionary tactics

University degrees won't improve ethics, the suggestion that they will is just a diversion from the real problems the industry faces. Robert M.C. Brown writes.
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AMP not a lone voice backing commissions

The beleaguered wealth giant says a proposed hard cut to grandfathered commissions may hurt advice firms, advisers and clients – it’s not the only one.
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Take a hard line on ethics

If advisers want to repair the industry's public image, they will need to make an honest assessment of their own ethics in practice and take responsibility for raising the bar.
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Wealth divestment a ‘strategic highlight’: Thorburn

The NAB chief called a $360 million remediation bill a “disappointing outcome” during the bank’s 2017-18 results announcement but celebrated the decision to offload the wealth arm.
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Dismantling the regulator is not out of the question

In all of Kenneth Hayne’s comments throughout the royal commission hearings and in the interim report, his views on the regulator were the most emphatic, Matthew Smith writes.
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Commission bans, not FASEA, hit practice values

As the industry braces for a likely end to grandfathered commissions, the value of advice firms has dropped 15pc. Whether they bounce back or fall further depends on whom you ask.
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Advice in the wake of Hayne

Kenneth Hayne jolted institutions into high-profile moves to ban some conflicted remuneration but there are more issues to address and there will be more announcements to come.
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Rice Warner says super overhaul will confuse members

Members making claims without realising they are no longer insured is one negative effect Rice Warner says would rise from planned reforms.
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ANZ chief pulled up on ‘shareholder interests’ rhetoric

Shayne Elliott was largely uncontested on the stand in Canberra on Friday, until he was called out for using shareholder duty as a reason for past discretions.
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Licensees will be on the hook for best-interests lapses

The ability to prove rigorously that a product recommendation is in a client’s best interests does not currently sit within an adviser’s toolkit – that needs to change.
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Banks will face crisp penalties not wet lettuce

The inquiry’s interim report suggests regulators will soon be tough enough to make big institutions think twice about wrongdoing, Andrew Main writes.
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Door open for a review into individual licensing 

Adviser Rating's Mark Hoven says the royal commission’s interim report could lead to Kenneth Hayne recommending a review of the current licencing regime.  
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FPA, AFA chastised in interim report

Commissioner Hayne singled out the FPA and the AFA for their lack of involvement in adviser conduct standards. "Much will depend on" their ability to improve, he wrote.
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‘Siren song’ of finance sucked in advisers

The commissioner’s interim report suggests his recommendations will focus on empowering and educating individuals to do the right thing, not adding more legislation.
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Hayne calls out regulators’ lack of action

The commissioner took ASIC and APRA to task for rarely if ever going to court against entities it accused of wrongdoing and often imposing what he deemed inadequate penalties.
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Let’s not have another FoFA

Commissioner Kenneth Hayne’s report shows he is keenly aware of the failures of FoFA and is keen to avoid letting history repeat itself.
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More trouble expected for banks in wealth

Analysts are tipping rising compensation costs and sliding share prices for the banks following the Hayne inquiry. The banks’ adviser numbers are already falling.
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Advice firms planning reactions to royal commission, FASEA

A high proportion of advisers will change their business models within the next 18 months, a PP Online poll reveals.
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Hayne report to push new advice standard

“Most wrongdoing is done by good people,” The Ethics Centre executive director Simon Longstaff says, while discussing the Hayne Inquiry’s upcoming recommendations.
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Inquiry could force banks to halve dividends

As the industry holds its breath for the commissioner’s recommendations, one expert warned that the gravy train of bank dividends could come to a grinding halt.
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Appetite for acquisition: what motivated buyers want

Buyers of advice businesses want to build scale despite the uncertainty that's hovering over the industry, they're just taking care to be smart about it.
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Advisers see regulation, FASEA standards hindering growth

New research shows the compliance burden and FASEA’s impending standards are the greatest perceived threats to growth. Advisers will look to licensees for help.
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Where to now for the life insurance industry

It is going to be more important than ever for life cover to be sold by advisers who have a deep understanding of why people might need it, writes Andrew Main.
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NAB nixes ‘wealth’ in leadership shuffle

Changes to the bank’s executive team lead to abandonment of the term ‘wealth management’, amid reputational damage control.
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Many advisers are planning to fail: research

As long as revenue keeps rolling in, advisers think everything is going to be fine, new data shows – but the truth may well be different.
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TAL’s covert surveillance revealed at Hayne inquiry

The insurer hired a private investigator and used medical professionals to find evidence that would allow it to discontinue an expensive claim.
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CommInsure grilled by Hayne inquiry

CommInsure's Helen Troup accepted the bank was motivated by "commercial considerations" in not updating a heart attack definition, which led to rejections of valid claims.
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More class actions against retail funds ‘within weeks’

AMP and Commonwealth Bank’s Colonial First State were singled out by a law firm that could file class actions in which “a third of adult Australians” could be eligible. 
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Insurance round opens with long list of misconduct

The fist insurance round of the Hayne royal commission got under way with council assisting Rowena Orr producing a long list of admitted wrongdoing by industry giants.
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Royal commission unlikely to boost Millennial super funds

The fallout from the revelations of the royal commission won’t lead to a boon for newer funds targeting the younger age cohort, according to Grow Super’s Joshua Wilson.
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Retail funds take heat in Hayne searing of super

It was the big retail brands – NAB, CBA, AMP, IOOF and ANZ – that ended up wearing the brunt of the commissioner Hayne’s ire during the fifth installment of the royal commission.
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ASIC puts banks, AMP on notice; IOOF, APRA probed

ASIC expects proceedings soon on fee-for-no-service and a long history of dealings between APRA and IOOF come in for scrutiny.
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Time to ‘reflect and reform’: O’Dwyer

The financial services minister has implored the industry to draw a line in the sand in the wake of the royal commission. The opportunity, she says, is unprecedented.
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The advisers who knew too much

Advisers with the most experience might also be the riskiest to employ in the eyes of wealth management firm owners, new research shows.
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Ex-bank advisers need not apply

A recruitment specialist says private advice firms are reluctant to consider hiring ex-bank advisers, but industry super funds are increasingly willing to bring them on board.
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A moveable feast: where advisers will land in 2019

Proposed bank spinoffs and disposals, along with the exit of a top-10 dealer group, have the industry in flux. Here’s what advice ownership could look like in 2019.
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CBA joins the great wealth escape

The disintegration of the institutional wealth advice model is happening. The banks are announcing sell-offs, spin-offs and divestitures of their wealth management businesses.
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Expect legislators to come down hard: Bernie Ripoll

Politicians will have plenty of motivation to drop the hammer on the financial planning industry, the architect of the Future of Financial Advice reforms told Professional Planner.
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Battle of the ban: the conflict to end grandfathered commissions

The FPA and ASIC have drawn a line in the sand. The time has come to end grandfathered commissions, they say, but many predict harmful unintended consequences. Matthew Smith writes
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What if the advice industry were already a profession?

Issues that arose during the royal commission public hearings might have been treated differently had a profession, as defined here, existed at the time.
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Licensees must be proactive rebuilding trust: De Gori

Advisers need to demystify planning and educate the wider public on what great advice can do for them. But they need assistance, and that’s where licensees come in.
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Now might be a good time to sell your practice

Valuations of commission-based businesses will come under more pressure from buyers as risks related to the future of these income streams develop.
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Hayne inquiry didn’t uncover real issues: poll

A Professional Planner survey has revealed that 70 per cent of advisers don’t believe the hearings cut through to the most pressing problems the industry faces.
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Show your worth: the new licensee value proposition

The days of subsidised advice within vertical integration may be numbered. As the industry evolves, licensees will have to do more to show their usefulness.  
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Holes remain while royal commission plays out

Twenty of the 50 recommendations the ASIC Enforcement Review Taskforce made are on hold while the high-profile inquiry continues, despite being agreed to by the government.
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Royal commission wrap: the waiting is the hardest part

Advisers are left to speculate about reform recommendations while they endure months or more of dread before Kenneth Hayne files his report.
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Royal commission just keeps getting worse

As if the problems the inquiry has uncovered aren’t bad enough, the complaints processes don’t necessarily offer consumers relief, Max Newnham writes.
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NAB’s Hagger explains why the time is right

Speaking to Professional Planner on the day of the bank’s announcement that it will sell the bulk of its advice division, chief customer officer Andrew Hagger expounds on the move.
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Resignation announcement adds to AMP’s woes

Statements in AMP’s announcement of the departure of its chairman raise further questions about who influenced a report on fees for no advice.
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Mopping up the mess: where to start

The aftermath of the inquiry will entail a good deal more uproar before the clean up begins. Then the real work gets under way.
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Man in the mirror: Advisers committed to making a change

Professionalism in advice matters, and the journey there starts with personal accountability.
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Punishment or wet lettuce?

The inquiry’s look at institutions’ handling of complaints hasn’t exactly turned up harsh retribution for offenders.
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Revelations, regulation and sullied reputations

As the details of misdeeds at the big end of town flood out of the inquiry, the industry’s many upstanding advisers are seeing their hard-earned stature swept away.
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Here’s hoping it’s a royal jolt

There are many potential outcomes for the royal commission into the banks, but it could all be worthwhile.
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Planners split on banking royal commission call

Financial planners are split on opposition leader Bill Shorten’s proposed royal commission into banking and financial services, with a slight majority saying they do not approve