The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established on 14 December 2017, with an interim report from the Honourable Kenneth Hayne AC QC due no later than 30 September 2018, and a final report due by 1 February 2019.
I’m sure many of you are aware of the Royal Commission and many of its findings, which have been damning to say the least. The four major banks are already on the front foot in regard to bailing out of financial services in a large way, having divested most of their insurance businesses over the past 12 months, and now announcing the same for their wealth businesses (Colonial First State (CBA), MLC (NAB) and OnePath (ANZ)).
These businesses, including AMP, have been built on a model of vertical integration, i.e. they own the product distribution network (financial planners), wealth platforms, and fund managers, with money being made at each step along the way. Of course, the financial planners are supposed to put the needs of their client first, however the Royal Commission has shown that corporate profits have been the priority of banking and insurance company executives, to the detriment of their clients. This is an outcome of the sales culture that has permeated these businesses for many years, and which creates an inherent conflict of profits before clients.
It is only now, with the benefit of the Royal Commission, that the public has become fully aware of just how problematic this culture and these conflicts have been (Government and Industry have been aware of it for years!).
As you know, Bravium engages with our clients using a vastly different approach, as we believe clients are seeking the value of advice and are not looking to be ‘sold’ products that do not fit in with their individual needs. We are paid by our clients and only our clients, which ensures that our clients’ needs are our first and foremost priority.
We hope that the findings of the Royal Commission will finally give Australians access to better quality advice across the entire financial planning community, allowing the industry to flourish as a true profession.