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.
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Rob has been our advisor for around 6 months now and to say we’ve been happy with his service is a huge understatement. His attention to detail, responsiveness and general customer service are exceptional. We’re now on the path to a much brighter retirement and hopefully reaching it a few years earlier too!
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It’s always a wonderful experience working with rob rich. His financial advice, care and customer service is beyond exceptional and can trust that we have our finances in the right hands. Only one phone call away rob is always happy to assist and we will definitely continue to recommend him to friends and family
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My husband and I wanted to find a trusted partner to advise us on our financial plans and help grow our wealth. We met with a couple of firms before meeting with Rob and they just didn’t grab us and it just didn’t feel right. One meeting with Rob and we were both sold on the spot that Rob was our man. And we haven’t looked back. Rob offers a very prompt, efficient and client focused service and always keeps us up to date and on track with what is happening with our portfolio. We couldn’t be happier with the service we’ve received from Rob and wouldn’t hesitate in recommending him to others looking for a trusted financial advisor.
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What an amazing man! Down to earth, realistic and honestly knows his stuff. I have never felt so comfortable leaving my finances in the hands of another person and all it takes is one chat with Robert and he will put you at ease. Thanks, Rob
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My wife and I have been fortunate enough to work close with Robert and he has been amazing. Its really special to feel like you are actually cared for and know I am in good hands with our plans. I recommend Robert and his team to anyone. Thank you again for making our experience so memorable.
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It was a pleasure to engage Rob to assist with a review of my fiances which included financial modelling of 3 options for my property plans and a review of personal insurances tailored to my needs. He displayed great patience and understanding throughout my journey and gently sent reminders for paperwork he needed without being pushy. He was contactable in person, email, text messages even outside of standard business hours. The plan he produced was not only tailored to me, but his approach and style he adopted was very tailored as well. The future of Financial planning in in safe hands with approaches like Rob’s.
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Robert is one of the nicest and most knowledgeable financial advisors I have come across. After previously dealing with advisors that left me disheartened Robs patient and understanding approach mixed with his positive attitude and in-depth knowledge is unparalleled .
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I would highly recommend Rob as a caring and passionate financial advisor. Before meeting with rob I felt very apprehensive about discussing our financial situation but rob quickly put my mind at ease and made me feel very comfortable. He asked lots of questions in order to ascertain our true situation and tailor advice accordingly. Beforehand I was nervous about our financial future moving into retirement but his advise showed us how we cam move forward with confidence, taking the worry away. We will be staying with rob for the long term
- Alison Taylor
We have been working with Robert since February this year, just prior to the birth of our second child. He has been a pleasure to work with and has provided comprehensive financial advice to us. Robert takes the time to get to know you and your family so that he can fully understand your financial situation and what your plans and goals are for now and into the future. He is extremely knowledgeable and very passionate about his job. He is a great communicator, responds to calls and emails promptly, and displays a genuine interest in our family. I have no hesitation in recommending Robert and Endorphin Wealth Management
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Rob Rich has a well-earned reputation for providing articulate and direct financial advice and he has been the consummate professional for me, particularly regarding my superannuation. His intelligent approach and outstanding knowledge has been second to none. He's a great communicator and has done a fantastic job of translating complex financial issues and concepts into terms that are easy to understand. I would certainly recommend Rob and Endorphin for his well considered and practical advice.
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Phillip has been my financial advisor for the last few years and I could not be happier. The outstanding retirement planning and financial advice that Phillip provided has put me in the best possible position to enjoy my future with confidence, for which I am extremely grateful.
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Phil is attentive and super communicator, great advisor.
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Love working with Robert. He is highly skilled, practical and empathetic. Nothing is a problem and he goes ‘above and beyond’. I have no hesitation in recommending Robert as an excellent financial advisor.
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Phillip and the team at Endorphin have looked after my financial affairs for a few years now and I could not be happier. They are pro active with communication, experts at investment advice and are friendly and great to deal with. They are my trusted financials professionals. I highly recommend them if you are looking for a financial planning team that will look after you for the future.
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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.
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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.
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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.
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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.
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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.
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Phillip and the team provide quality advice. They carefully explain the available options and clearly set the client's interests as the priority.
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