(Bloomberg) -- by Emily Cadman
Australia’s big banks still need to improve oversight of their financial advisers, the nation’s security regulator said Friday, in a blow to the industry’s attempts to move on from a series of scandals that has cost the lenders millions of dollars.
An Australian Securities & Investments Commission report into how large financial firms have dealt with poor advisers concludes that while they have improved their practices, a number of problems remain. The review highlights repeated failures to notify the regulator about breaches of conduct, “significant delays’’ in reporting problems and inadequate background checking and information sharing within the industry.
The review covers the conduct of the financial-advice arms of Australia & New Zealand Banking Group Ltd., Commonwealth Bank of Australia, Westpac
Banking Corp., National Australia Bank Ltd. and AMP Ltd. The industry has collectively paid out A$30 million to customers who suffered losses from poor advice between 2009 and 2015, ASIC said.
Public disquiet over the scandals in banks’ insurance and wealth divisions was one of the main drivers behind a series of parliamentary hearings with the heads of the four biggest banks. At the most recent set of hearings, the bank chiefs sought to stress the work they have done to improve both systems and culture.
“There is a lot of room for improvement and a long way to go,’’ ASIC Deputy Chair Peter Kell said on a media call. The report should serve as a “wake-up call,” he said, promising “more action” if banks didn’t shape up.
head of wealth Alexis George said in an emailed statement that the bank is “surprised” by the findings relating to internal audits, adding it takes a “hard-line approach” with any advisers who do the wrong thing.
National Australia chief customer officer Andrew Hagger said in a statement on its website that the regulator has not yet shared with it any findings that relate specifically to National Australia. “When we do find issues, we will say sorry to customers and make things right,” he said.
“The industry is driving its own reforms to improve the quality of financial advice,” said Diane Tate, a spokeswoman on retail policy for the Australian Bankers’ Association.