The findings of the banking royal commission so far has proven the need for banks and institutions to win back trust between consumers and the financial services sector, Minister for Revenue and Financial Services Kelly O’Dwyer has said.
At the recent SMSF Association SMSF Expo for trustees held in Melbourne, O’Dwyer said the government was aware of some financial advisers providing bad advice, some of which was conflicted and not in the best interests of consumers.
“We should recognise that the banks and other financial institutions have a duty to repair trust and to compensate those people who have been damaged by their actions. Their boards should act now,” O’Dwyer said.
“As someone who believes very strongly in standing up for consumers I am greatly disturbed by the revelations that have aired during the royal commission.
“Already, the royal commission has highlighted in the most profound way, some of the devastating personal consequences that have resulted from corporate misconduct in the financial services sector.”
During the expo’s opening address, SMSF Association chief executive John Maroney said the peak industry body believes the poor practices and behaviour in the financial advice industry unveiled in recent weeks are extremely disappointing.
“We strongly condemn such practices and behaviour,” Maroney said.
“Advocating higher standards of SMSF advice has been this association’s mantra since its foundation in 2003, and our continuing professional development program, code of conduct and accreditation programs are testimony to our commitment.
“Finally, our conduct and disciplinary procedures are designed to ensure that any complaints are handled effectively, expeditiously, and observe the principles of natural justice and procedural fairness.”
O’Dwyer said the government has now taken action and will continue to do so to fix the problems in the financial services sector.
“As minister, I am totally focused on this task,” she said.
“Many people have asked why the government opposed a royal commission for so long. And it is a legitimate question.
“With the benefit of hindsight we should have called it earlier. I am sorry we didn’t, and I regret not saying this when asked earlier [last] week. The government did get the timing wrong.”
On Friday, O’Dwyer also revealed the government will propose to increase the limit on the maximum number of members in an SMSF from four to six, which will allow greater flexibility given the growth in the sector to date.