Euromoney, March 2019
The final report of Australia’s Royal Commission into misbehaviour in financial services had plenty of blood and thunder, and has already brought down the top executives of National Australia Bank, but it doesn’t bring the promise of lasting reform.
Early February in Australia had everything.
It had the most uncomfortable photo call in recent memory, as Kenneth Hayne, in handing over his Royal Commission report into banking, declined the requests of the press pack to shake the hand of Australian treasurer Josh Frydenberg.
It had a top banking executive who, at the precise moment of the report’s formal launch, was out selling The Big Issue. It had the ousting of both the chairman and chief executive of National Australia Bank simultaneously.
It had everything, in fact, except the promise of genuine reform to the Australian banking system.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, to give it its full title, concluded with the presentation of a 1,000 page report from commissioner Hayne to Frydenberg on Friday, February 1. The report’s release to the public – and the banks who were in it, who had had no advance peek – came the following Monday.
It contained 76 recommendations across a range of fields. In particular, mortgage broking will be reformed, with conflicted commission structures removed; in financial advice, where this was already supposed to be the case, any grandfathered incidences of trail fees will be outlawed; banks will no longer be allowed to sell superannuation funds; and the regulators will be strongly encouraged to prosecute more and prevaricate less.
But the single most important anticipated change did not happen. Many had expected that banks would be forced to sell their wealth management businesses. That measure did not come.
People are disappointed, says Carden Calder, founder of communications group BlueChip, by a “toothless, bloodless ending”.
And when the dust settles the banking industry is likely to end up looking a great deal like it already does.