[The comments attached to this article were made by readers last week, and are republished this week to allow readers to see these opinions and add new ones if they wish].
It’s hard to believe the Financial Services Royal Commission has heard only three weeks of witness statements, and one week on financial advice. There’s enough material to fill a few books, and contrary to my expectations, significant changes are likely in wealth management.
A summary barely scratches the surface, but some lowlights include:
- AMP giving 20 misleading statements to its regulator. Under section 1308(2) of the Corporations Act, it is a criminal offence for any person to give “false or misleading” statements to ASIC.
- The head of the financial advice business saying he had not “turned my mind” to thinking about adviser commissions.
- Collecting financial advice fees but not meeting the client, with the Commission calling CBA the “Gold Medallist” in fee-for-no-service.
- An external “independent” board report for ASIC revised by AMP management through 25 drafts, including redacting the CEO’s name.
- An executive unable to identify what he was apologising for.
- Using the ACCC acronym for the Advice, Culture & Compliance Committee.
- Counsel accusing a CBA witness of “dissembling” and “misleading”.
- CBA’s “hopeless” systems failing to identify adviser errors and not notifying the regulator of breaches for years.
- Fees charged on the estates of dead clients for a decade after their death.
- Failing to dismiss advisers who had clearly provided poor advice for years, and not warning their next employer.
Before the end of the week, AMP CEO, Craig Meller, had resigned, AMP Chair Catherine Brenner was under siege and the entire vertical integration model of the banks was in jeopardy with nobody capable of defending it. New penalties for breaching the Corporations Act were announced.
It’s also apparent from the emails sent by independent financial advisers (with no affiliations to the big players) to their clients that the reputation of the entire financial advice industry has taken a battering, even the fee-for-service businesses who tried to avoid the conflicts.