Senator calls for Royal Commission into financial planning industry

Clearly there is a problem with ASIC and its complaints register.

With AFSA previously called ITSA 90 % of complaints made about shonky Trustee are fucked over because Matthew Osborne , Principal Legal officer is advising regulation that a trustee has the discretion to fuck over and breach the Bankruptcy Act.

This allows AFSA to protect shonky trustee like Paul Pattison. After an FOI, AFSA admitted they had only received a small number of complaints about Pattison. The fact actually is AFSA received over 40 complaints about Pattison and still failed to act. AFSA also misled Senator John Williams on this.

As with the shonky Financial Adviser Peter Holt ASIC failed to act on numerous complaints made against him. This would have been because of the shonks working in the ASIC Legal department fucking over ASIC obligations

Bob Katter's daughter previously worked in ASIC's Legal Department in Sydney.

Australian Broadcasting Corporation

Broadcast: 26/06/2014

Reporter: Sarah Ferguson

Misconduct by financial advisers detailed in a Senate committee report questions the credibility of the Commonwealth Bank and financial regulator ASIC to such a degree that a Royal Commission into the industry is needed, according to Senator Mark Bishop.

Transcript

SARAH FERGUSON, PRESENTER: Allegations of fraud, forgery and a cover-up have emerged from a Senate inquiry into the financial regulator and Commonwealth Bank.

The Senate report has slammed ASIC's handling of rogue financial planners at the Commonwealth Bank and is calling for a Royal commission.

The bank is accused of encouraging a culture where advisors were rewarded with big commissions for talking clients into risky products, and when clients lost money, the wrongdoing was covered up and compensation was minimal.

The Senate Economics Committee has described the corporate watchdog as timid and hesitant in its handling of the case.

Retiring Labor senator Mark Bishop, who chaired the committee, joins me now live from Canberra.

Mark Bishop, welcome to 7.30.

MARK BISHOP, RETIRING LABOR SENATOR: Thank you and good evening.

SARAH FERGUSON: Now, you're calling for a Royal commission into the Commonwealth Bank and ASIC. Just starting with the bank, what have they done to warrant that call?

MARK BISHOP: What they've done is that they have not done enough. They haven't opened up their books. They haven't disclosed the full extent - the full number of clients who have been affected. They haven't paid adequate compensation to those who haven't been offered compensation. And more importantly, we're still unaware, after six months, as to the real extent of the damage. It's time to open up the books.

SARAH FERGUSON: Alright. Well tell me what you think the real extents of the damage is. What sort of number of victims of this dodgy financial planning are we talking about?

MARK BISHOP: We know the Commonwealth Bank's arm had 300,000 clients over a period of years. We know that 400 or a few more have received some form of compensation. We know that at least 7,000 files are considered to be suspect. Somewhere between 400 and that 7,000, possibly up into the tens of thousands of persons have suffered real harm, haven't received adequate compensation and deserve to have their files reconstructed and re-examined in a transparent, open, accountable manner.

SARAH FERGUSON: Now, the Commonwealth Bank tonight is saying that they've apologised for the mistakes of the planners that were identified by your committee and that they now have robust procedures in place to stop that sort of dodgy planning advice coming again. Do you accept that?

MARK BISHOP: I accept that they have put in place some remediation, that they have paid $50 or $60 million to some clients. We still don't know how many clients are affected. There hasn't been a full independent examination of their books and we do know that those clients who retained reputable law firms to act on their behalf received significantly higher compensation payments than those who used the services offered by the Commonwealth Bank. Yes, they've made some changes, but nowhere near enough.

SARAH FERGUSON: So you're saying that the Commonwealth Bank is still covering up the extent of the number of victims and the extent of their suffering?

MARK BISHOP: I'm saying that the Commonwealth Bank needs to release the full number of clients, the number of clients who have lost serious amounts of money, the reasons for those losses and offer compensation via a reputable accounting firm or a reputable legal firm to end this nightmare that thousands and thousands of individuals and families are going through.

SARAH FERGUSON: Now, what did the Commonwealth Bank do when it realised that it had these planners offering very high-risk advice? Did it move quickly to shut them down?

MARK BISHOP: No, no, it didn't. It acted inordinately slowly. Those financial planners had thousands of clients, they were reaping in millions of dollars of fees, a large share of that went up the bank chain in terms of profit and was returned to shareholders. It was only after extensive, repeated and extensive demands for inquiry and report and repair did the Commonwealth Bank put into place some mechanisms for change.

SARAH FERGUSON: So are you saying the Commonwealth Bank kept those financial planners in place knowing what they were doing?

MARK BISHOP: A number were let go - were removed after some years. A large number of those financial planners still remain in the bank and some indeed have been promoted.

SARAH FERGUSON: Now your report also looks at the behaviour of ASIC and they're part of your call for a Royal commission. How quickly did ASIC respond to the whistleblowers who came to them reporting that they were suffering at the hands of these financial planners?

MARK BISHOP: If I have been critical of the Commonwealth Bank, I'm equally critical - the report is equally critical of ASIC. It has been slow, it has been unresponsive, it hasn't taken reports seriously, it hasn't pursued investigations properly, agreements that have been reached haven't been enforced properly. Its tale is a tale of woe and clients and people in the wider community have continued to suffer because of their inordinately unresponsive and slow reaction.

SARAH FERGUSON: And they're about to have a fairly large budget cut, ASIC. Is the situation going to get worse for them?

MARK BISHOP: As this industry grows, as it goes into a trillion-dollar industry, as more firms emerge and lobby and gain business, we need to have a strong, effective, feared regulator. That's going to mean that Government in due course is going to have to allocate further funds, by whatever means, so that ASIC can do the job that's needed to be done on behalf of millions of Australians.

SARAH FERGUSON: Mark Bishop, thank you very much indeed for joining us.

MARK BISHOP: Thank you very much.