Royal Commission will trump the Productivity Commission says Labor
The Government would be better off having a Royal Commission into the banks than relying on another Productivity Commission (PC) inquiry, according to the Federal Opposition leader, Bill Shorten.
Just hours after the Government moved to place vertical integration in the financial services industry under the microscope via a new inquiry reference to the PC, Shorten described it as a joke and said only a Royal Commission could succeed in stopping “bank rip-offs”.
The PC inquiry reference was announced by the Federal Treasurer, Scott Morrison, on Monday just 24 hours before the Federal Budget with the Treasurer saying he had told the PC to hold an inquiry into competition in Australia’s financial system consistent with the Government’s response to the Financial System Inquiry (FSI).
Importantly the PC inquiry will come at a time when many of the banks’ half-year reports to the Australian Securities Exchange (ASX) point to ongoing challenges within their wealth divisions with mounting regulatory costs undermining advice revenues.
The Government announcement was welcomed by the Australian Bankers Association (ABA) which said it was pleasing the inquiry would look at all parts of the financial services industry.
Morrison said the PC would look at how to improve consumer outcomes, the productivity and international competitiveness of the financial system and economy more broadly, and support financial system innovation, while balancing financial stability objectives.
The Treasurer said that, in doing so, the PC would consider the level of contestability and concentration in key segments of the financial system, including the degree of vertical and horizontal integration.
It will also examine competition in the provision of personal deposit accounts and mortgages and services and finance to small and medium businesses.
The Inquiry will commence on 1 July 2017 and is due to report to the Government by 1 July 2018.
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
