'Reprehensible': Top banker's damning verdict on dodgy advisors
AS revelations from the Financial Services Royal Commission rock the industry and government, the NewsMail has spoken with one of Bundaberg's prominent banking figures.
Auswide CEO Martin Barrett has shared his thoughts on the unfolding events, including his belief that 'unethical or incompetent behaviour should carry substantial personal cost for the advisor".
Mr Barrett has described some of the findings of the actions of the big banks and AMP as "reprehensible".
NewsMail: What are your thoughts on the royal commission?
Martin Barrett: I support the Royal Commission as I believe in the need for integrity and trust in banks and the financial system.
A Royal Commission is designed to find fault and to ensure corrective action. So far it has certainly done that.
NM: Does you have any comments regarding the fee-for-no-service scandal?
MB: The recent findings regarding the big financial planning businesses of the Big Banks and AMP have been reprehensible.
Clearly banks and AMP are businesses.
They exist to provide products and services to customers and to make profits for their owners.
However this needs to be fair and ethical.
The revelations regarding fees for no service and the culture that somehow thought this was acceptable or at least acceptable to do nothing is an appalling example of poor leadership, governance and thus culture.
The reality is that everyone and every business will make mistakes.
The important thing is that mistakes are identified, corrected quickly and that there is a culture of fairness.
NM: Has the bank had any enquires from customers about the Royal Commission?
MB: We understand customers of the big banks have been venting their dissatisfaction at the big banks and the series of negative findings.
We have had some customer comments and questions but not many.
NM: Is there any advice to Auswide Bank customers to reassure them if they have any concerns?
MB: Talk to us if you're one of our valued customers or one of the big bank's customers that may have concerns.
The community however should understand that the vast majority of those working in the big banks and AMP are genuinely trying to do the best for their customers.
NM: Financial advice is important, but do you feel there should be a guideline to what is provided?
MB: Financial advice is important.
We live in a highly complex financial world that is requiring individuals to ensure their own future retirement.
I believe the challenge is broader than financial planners.
The challenge stems to our education system and the lack of financial awareness the vast majority of the community have.
Superannuation, taxation, savings, investment and the basics of the economy are all areas that some grounding should be provided to us through our schooling or through other education means.
If nothing else this simple rule should be understood.
Higher return Higher Risk. In other words if you're looking for a better interest rate or higher returns on your money then, in general, this comes with a higher level of risk.
If you don't understand the risk, then think long and hard before you commit including finding someone who can explain it clearly to you.
Overall I do believe that we need a lift in both qualifications of financial planners but also a system that allows everyone that needs/wants advice to be able to receive it at a cost appropriate to their circumstances and investment size/requirements.
Commission based remuneration structures should be scrapped unless safeguards can be put in place. Unethical or incompetent behaviour should carry substantial personal cost for the advisor.
NM: Are there any further comments regarding the Banking Royal Commission you would like to make?
MB: There is someway yet to go with the Royal Commission, it will continue to highlight the worst of the behaviour for sometime yet.
That's what it is designed to do.
Ultimately it will shake up the boards and executives of those exposed and it will sharpen the attention to governance, ethics and culture across the sector.