The corporate watchdog has released yet another scathing report into the big financial advice firms, finding that they have not done enough to report misbehaviour by their financial advisers.

Only one week ago the CEOs of the big four banks lined up in Canberra to reassure community that the banks were changing their ways, however, the ASIC report paints a very different picture.                    

Key findings of the report released today include:

  • Failure to notify ASIC about serious non-compliance concerns regarding adviser conduct;
  • Significant delays between the institution first becoming aware of the misconduct and reporting it to ASIC;
  • Inadequate background and reference-checking processes; and
  • Inadequate audit processes to assess whether the advice complied with the "best interest" duty and other obligations.

ASIC also noted:

“…many of the institutions we reviewed did not ensure that their internal processes consistently supported the value of ‘doing what is right’ for the customer. Many of the failings we identified led, or had the potential to lead, to poor outcomes for customers.” – Financial advice: Review of how large institutions oversee their advisers, page 15.

Dodgy financial advice and poor professional conduct have been at the centre of many of the financial scandals in Australia so it staggering to learn that despite warnings over many years, the big firms are dragging the chain in reporting to the regulator or improving processes within their own organisations. 

How much longer and how many reports will it take before Malcolm Turnbull stops protecting the banks and instead stands up for banking customers? 

Labor will continue to fight for a royal commission because we know it is the only way to shine a light on the misconduct and cultural issues in the banks that have led to thousands of Australians, including small businesses, being ripped off or treated unfairly by them.


Senator Katy Gallagher is Labor's Shadow Minister for Small Business and Financial Services.

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