Tornado Alley (PROG)

[fuagf]

Oh yes, Australian need also .. Financial advice victims demand royal commission

AAP April 21, 2015 7:15PM

Victims of bad financial advice are demanding the Abbott government reconsider its decision not to have a royal commission into the industry.

Independent senator Nick Xenophon is also pursuing new laws to establish a statutory compensation scheme for victims of bad financial advice.

"God help you if you think you can pursue that through the courts against the major financial institutions - it will break you financially," Senator Xenophon told reporters in Canberra.

A new Senate inquiry into financial advisers was launched after a string of scandals spanning a number of years with the heads of some the nation's major banks supporting the idea.

But victims that have lost millions through poor financial advice want action now.

Marilyn Swan, representing victims of the Commonwealth Bank of Australia's financial arm including her own parents, is concerned the Australian Investments and Securities Commission has done little or nothing in the past 12 months despite evidence to a previous Senate inquiry.

"White collar criminals working in the financial sector have not been brought to justice," she told the Canberra hearing on Tuesday.

"How long does my now 90-year-old father have to wait to see some justice?"

So far the Commonwealth Bank has paid out an average of $15,000 in compensation to just three people, while a further 207 have been assessed for a total amount of just over $500,000.

CBA chief Ian Narev told the hearing he fully understood the concerns and frustration of the victims, but he does have 400 people trying to resolve the issue quickly, "but we must get it right."

Macquarie Bank boss Nicholas Moore believes a victim compensation scheme for those found to have suffered would be part of the evolution of the financial planning industry. Such schemes were in place for other professional bodies.

ANZ deputy head Graham Hodges believes organisations that have sufficient financial strength should be allowed to self-insure, but those that don't should be required to take out some insurance.

"When you meet with the people who have gone through the extreme hardship ... where there is no one to go to, you can see why it is worthwhile putting in place a scheme," he said.

National Australia Bank chief Andrew Thorburn insists his bank has dealt with both its domestic and offshore problems "thoroughly and professionally".

Last year the NAB confessed it had been paying out millions of dollars to customers over five years because of bad advice, resulting in a number of sackings.

Its UK banking arms, Clydesdale and Yorkshire banks, were fined a record £20.7 million ($A39.95 million) earlier this month after incorrectly selling insurance to customers and then subsequently misleading the British financial ombudsman with false information.

http://www.theaustralian.com.au/business/latest/financial-advice-victims-demand-royal-commission/story-e6frg90f-1227314165876

early in yours .. "As Warren says in her speech:

"...without some basic rules and accountability, financial markets don't work. People get ripped off, risk-taking
explodes, and the markets blow up. That's just an empirical fact - clearly observable in 1929 and again in 2008."
http://www.huffingtonpost.com/mike-lux/elizabeth-warrens-compreh_b_7087582.html [with comments]

Hmm, yeah, we KNOW evolution is a slow process, yet does the banking industry have to be
so slow in evolving from just another one playing in/on that particular Social Darwinism field?