Last report by Parliamentary Committee backs continuing vertical integration

15 May 2019
| By Mike |
image
image
expand image

In a report tabled well after the proroguing of the Parliament, a key parliamentary committee has rejected legislation which would have substantially ended vertical integration in the financial services industry.

The Senate Economics Legislation Committee rejected the legislation put forward by the Pauline Hanson’s One Nation Party which was aimed at protecting bank deposits by ending vertical integration and therefore eliminating cross-selling.

Hanson had backed the legislation in the Senate with a second reading speech which stated: “The vertical integration of the banks providing additional services including financial advice, insurance and superannuation have been shown to be the root cause of rorts, over charging and profit gouging”.

However, both Government and Labor Party senators rejected the bill with the chair of the committee, Victorian Liberal Senator, Jane Hume stating the committee was confident the current legislative protections “are sufficient to ensure that the money held in bank deposits are safe”.

“In support of that conclusion, the committee notes that during 2008-09, no Australian bank collapsed and no deposits were lost despite the worst financial crisis since the Great Depression of 1929-33,” her report said.

Labor members of the committee also rejected the bill noting that neither the Royal Commission nor the Productivity Commission had recommended any structural separation of the banks.

However, their part of the committee report stated: “Labor Senators are determined to ensure that the banking and financial sector is held to account for their actions wherever there has been misconduct or unethical behaviour” and added that they were focused on implementing the recommendations o the Royal Commission to “deliver lasting, comprehensive change to financial services”.

“Labor will fully implement 75 of the 76 recommendations, and will implement the final recommendation, Recommendation 1.3—Mortgage Broker Remuneration, in a manner that achieves the objectives but without harming competition in the retail mortgage market. We are sticking to our tougher, fairer and faster plan to implement its recommendations,” the Labor Senators said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 3 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

2 weeks 5 days ago