The scores are in and for those waiting to see the awesome power of a Royal Commission in action, the final blow seemed no more than a jab.
The final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was handed down by commissioner Kenneth Hayne yesterday. After a year of horror stories ranging from charging the dead fees to predatory sales techniques used against the vulnerable, many were unhappy with the recommendations made.
Among the hearings we were told that older Aussies were being given large loans that they didn’t understand and were often bullied into “emotional lending” with a child or loved one.
“Members of the public have lodged submissions about advice received where they could not reasonably be expected to understand or manage the ongoing risk associated with the investment. These include submissions from vulnerable people such as elderly people and people with a disability,” assisting counsel Rowena Orr told the commission.
“In one example, a couple approaching retirement who had sought financial advice to set up an allocated pension fund were convinced to set up a diversified portfolio and lost approximately $170,000 over the next 17 months,” she said.
COTA Australia chief executive Ian Yates welcomed many recommendations of the Hayne Royal Commission but called for stronger consumer voices to be supported into the future.
“The industry’s not going to become angels overnight and strong consumer voices are needed to draw issues and problems to the attention of the wider community,” he said.
The aged care sector has already seen its link to the banking industry, with the shares of the three listed care providers dropping by 30-40 per cent during the 2108 calendar year and down between 2 and 6 per cent since the initial hearing, mirroring the stock losses of the big banks after Hayne’s interim report.
But in an interesting twist, aged care commissioner Lynelle Briggs had a part to play in the banking royal commission.
As chair of the General Insurance Code Governance Committee, she gave witness testimony and was mentioned in the final report. It states that:
“Code subscribers had conceded breaches of the Code in the course of an investigation on a further 689 occasions, and had self-reported over 13,000 breaches of the Code. Despite this, the Code Governance Committee had never exercised its powers to impose sanctions in response to those breaches.”
Jason Harris, Professor of Corporate Law at the University of Sydney, believes the report showed no wrongdoing on Briggs’ part but rather made recommendations on the ability of the committee she chaired to impose sanctions when breaches occur.
“It seems there was concern that the Committee could only impose sanctions for failing to rectify breaches, rather than for mere breaches themselves,” he said.
However, Marie dela Rama, of the UTS Business School believes that Briggs’ involvement raises serious questions.
“It is clear Ms Briggs wears too many hats and discharging her duty as aged care royal commissioner is now compromised by her appearance in the Banking Royal Commission report,” she told Aged Care Insite.
“The release of Justice Kenneth Hayne’s landmark report on the financial services industry emphatically showed Ms Briggs was not fit to discharge her duty in one of her hats as chair of the General Insurance Code Governance Committee, a self-regulatory, self-reporting insurance industry mechanism.
“By reasons of resources and time, she needs to familiarise herself with the Hayne recommendations on sanctions so that she can properly discharge her responsibility as General Insurance Code Governance chair. She needs to step aside and allow another learned person untainted by the Banking Royal Commission to become the next aged care royal commissioner,” she said.
In his introduction to the final report, Hayne said: “The damage done by that conduct to individuals and to the overall health and reputation of the financial services industry has been large. Saying sorry and promising not to do it again has not prevented recurrence. The time has come to decide what is to be done in response to what has happened.”
Already, the same could be said of the aged care sector.Do you have an idea for a story?
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