The Financial Services Council (FSC) has acknowledged the conduct of financial services providers has been unacceptable over many years and the sector needs an urgent cultural transformation.
Following the release of the banking royal commission’s interim report last week, FSC chief executive Sally Loane said: “For consumers, interacting with banking and financial services is not voluntary. In a compulsory system everyone has a right to be treated with fairness, honesty and utmost professionalism.
“The industry takes responsibility for the culture that led to some deplorable outcomes for many consumers and a transformation is long overdue.”
The interim report identified greed and the pursuit of short-term profit by the sector at the expense of honesty as the reason for the misconduct.
However, the report said the law already stipulates what entities need to do to ensure the services they are licensed to provide are provided honestly and fairly, and questioned whether the existing laws need to be simplified.
The FSC said it supports the policy debate over whether the complex regulatory framework could be simplified.
It also said it supports Treasurer Josh Frydenburg’s comments that consumers must be put “first, second and third”.
“The FSC will develop a full response to the questions raised by the royal commission and outline a course of action for our members in due course,” Loane said.
The SMSF Association also welcomed the interim report, with acting chief executive Jordan George saying the industry body is working through the detail of the report.
“We support the royal commission process and recognise the need to improve standards of behaviour and service in the financial services industry given the revelations of the commission,” George told selfmanagedsuper.