Locked away for the afternoon at Old Parliament House in Canberra, consumer experts were given early access to the final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry so they could find out what it all means and whether Australians will finally have a financial system that works for us.
Along with our colleagues in the consumer movement we've been fighting for fairer finance for decades, and the royal commission represents one of the biggest interventions into these essential services for many years.
Lobbying, lobbying, lobbying: How did we get here?
While consumer advocates have long had a presence in the halls of Parliament, sharing the stories of the people we help and offering our expertise about the complex markets that impact our day-to-day lives, we've also shared these halls with lobbyists from the banking, insurance and superannuation industries.
Consistently, the work of those industry lobbyists has meant meaningful change is watered down. This royal commission report needs to be the end of that.
"This represents a key turning point for the industry and its lobby groups," says CHOICE CEO Alan Kirkland.
For too long, we have allowed banks to write and enforce their own rules
"Will they pretend to accept the recommendations then lobby to undermine them behind closed doors, as they have with every other major reform? Or will they realise that if they want to win back community trust, this time they need to act with integrity?
"The report is also a damning indictment of industry self-regulation. For too long, we have allowed banks to write and enforce their own rules. This means that the rules are weak and the consequences for breaking them are non-existent."
What needs to change
CHOICE says the following report recommendations need to be implemented as a matter of urgency:
- The end to weak self-regulation through industry codes that can be breached with no consequences.
- A ban on hawking financial products to unsuspecting Australians – especially insurance and superannuation.
- A ban on the payment of commissions to mortgage brokers and financial advisers – so it is clear that they act for the person seeking advice, and nobody else.
- An obligation that mortgage brokers act in the best interests of the person seeking a loan.
- An end to hidden fees for financial advice.
- A compensation scheme, funded by industry, to make sure that when consumers are found to deserve compensation it is paid.
Our expert team will be diving into the detail over the coming days.
Stock images: Getty, unless otherwise stated.