The Royal Commission Final Report – Endorphin Wealth’s Take
- February 05, 2019
- by Endorphin Wealth Management
The Royal Commission has released their 530 Page Final Report into the misconduct in the Banking, Superannuation and Financial Services Industry on Monday 04/02/2019.
As a firm that has been built on putting our clients before ourselves, we welcome the review into the industry, the regulators, the product providers and the practices offering financial services in Australia.
Commissioner Kenneth Hayne started his report by saying financial institutions and their staff have focused too much on the pursuit of profit and personal gain:
- “Providing a service to customers was relegated to second place. Sales became all important. Those who dealt with customers became sellers. And the confusion of roles extended well beyond front line service staff. Advisers became sellers and sellers became advisers.”
The highlights from the report include:
Fees For No Service
The final report recommends financial watchdogs consider criminal charges against the organisations linked to the “fees for no service” scandal.
The royal commission heard cases of customers being charged for services they had never received. In some cases, people were being charged fees even after they had died.
Australian Securities and Investment Commission (ASIC) and Australian Prudential Regulation Authority (APRA) will receive extra power by creating civil penalties for breaches of laws governing superannuation trustees and directors.
Pushing or ‘hawking’ of superannuation products would be prohibited to prevent people being sold superannuation products not in their best interest.
There will also be new protections to ensure superannuation fund members only have one default account.
Financial Industry Regulators
APRA and ASIC are to more heavily regulate conduct and disclosure requirements.
Commissioner Hayne urged ASIC to launch legal action when dealing with large corporations, rather than just issuing infringement notices when they breach laws. He said infringement notices should only be used in administrative matters:
- “Misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished,”
APRA and ASIC will also receive greater oversight with the creation of an independently chaired oversight body to ensure the regulators are being held accountable for their actions.
Some of the mortgage-broking industry’s worst fears are contained in the final report, with the commission recommending the industry move from a commission-based to fee-based model.
Currently, brokers receive upfront and trailing commissions from banks and other lenders, meaning the broker is incentivised to secure the customer a loan. Mr Hayne recommends a “steady but deliberate” move from the existing model to a model where a borrower pays a fee instead.
The Government says it will ban trail commissions and other “inappropriate forms of lender-paid commissions” on new loans from July 2020, and will conduct a review in three years to consider the implications of removing upfront commissions and moving to the borrower-pays model.
Mr Hayne recommends a “best interest duty” law for the Mortgage Broking industry to mirror the laws already applied to the Financial Advice industry. A breach could lead to the broker being hit with a civil penalty.
Mr Hayne said there needed to be a debate about whether mortgage brokers were any different to other advisers.
“I consider that after a sufficient period of transition, mortgage brokers should be subject to and regulated by the law that applies to entities providing financial product advice to retail clients,” he wrote.
Commissioner Hayne now passes the baton to legislators and regulators to act on his recommendations, including enforcing existing laws and giving far greater priority to customer needs over profits.
ASIC moved yesterday to ban CBA’s financial planning business from charging any fees or taking on new customers after the regulator determined that the bank hadn’t yet properly rectified their previous issues of charging fees for advice they never received.
How Endorphin Wealth Can Help
When it comes to investing your money – there are a number of things you have a right to expect from your wealth advisor or financial planner.
Ongoing personal attention, for instance, rather than attention that seems to fade after you’ve initially signed up. Access to a full range of investment options, as opposed to a range limited to products owned by your advisor’s employer. And a fee structure that is fair and doesn’t see your earnings diminished by ongoing payments to your advisor.
As a boutique, privately owned wealth advisory firm, Endorphin Wealth can confidently meet all these expectations and more, providing you with the personal, high-quality, tailored advice you deserve.
Obligation Free Initial Conversation
- February 2019
- January 2019
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- October 2017
- September 2017
- August 2017
- July 2017
- May 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- September 2016
- July 2016
- June 2016
- May 2016
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- December 2014
What our Clients Say
Robert Rich is a gun and has been a pleasure to work with, he spent a lot of time asking questions and listening to both my husband and I to get a deep understanding of our current financial situation of who we are and where we want to be. His advice has been comprehensive and easy to understand. The genuine interest and enthusiasm he has demonstrated has made the whole experience to date, fun and engaging (it has also been awesome to see some great financial results!). Rob is a great communicator and is always available to chat, meet up or respond to an email. We wish we had seen Rob earlier, and plan to have him as our advisor now and into the future, I have and will continue to recommend him and his services.
- Ellen Bond
Rob has been fantastic helping us set all our financials in order. We didn't want to have to worry about any of this stuff day to day. Rob put together a set and forget strategy that will see us in good shape for the future. Good guy, good advice, great help. Thanks again Rob
- Andy Wright
My husband and I had a wonderful experience with Rob. He is genuine and honest. He has done amazing things with our finances to ensure our future is set up the right way. He has gone above and beyond our expectations. I highly recommend Rob, he is an expert in his field.
- Anthea Husing
love working with Robert. He is highly skilled, practical and empathic. Nothing is a problem and he goes ‘above and beyond’. I have no hesitation in recommending Robert as an excellent financial advisor.
- Rebecca Carter
Robert has managed our finances over the last 12 months as if they were his own. He has an eye for detail and is incredibly enthusiastic. We have recommended him to all our friends & family.
- A. Miles
Rob has handled our finances for some time now. He provided us with sound advice and options. I highly recommend his services.
- Mathew Quinton
Robert Rich provided me excellent financial advice and assistance in finding the right insurance for me. He was incredibly patient, and I'd recommend him without hesitation.
- Edward Murrell
Rob has been helping me with my finances for just over 12 months now and i couldn't be happy, he is a wealth of knowledge and is amazing at what he does.
- Paul Scott Ray White
Phillip and the team provide quality advice. They carefully explain the available options and clearly set the client's interests as the priority.
- Jon Sutton
Rob has provided fantastic advise and clarity to myself and clients
- James Ruddick
Great guys! Amazing financial advice.
- Jay Boston
I cannot say enough about their professional manner and would highly recommend anyone I know to seek their services
- Heather B
Your knowledge of the financial market is up to date and your approach to my portfolio has been proactive
- Michael S
Thanks to Endorphin, I am now on the path to that dream of mine
- Jake F
The plan has definitely made a big difference to my lifestyle
- Josie W
It has been quite exciting and very comforting to have Endorphin looking after my financial future
- Susan A
They provided me with a sense of direction and security that I did not have previously
- Michelle C