My comment, “Simples”, was a bit facetious because I know that, between the government and the companies affected, things are often made anything but simple.
The point I was making applies to most managed fund investment, not just super.
I think the minima for wholesale in Australia may have been reduced over time. Fairly soon they will need to introduce a new category - retail, wholesale and ? to make up for the loss of what used to be real wholesale.
Was looking at one fund manager the other day on behalf of a family member and the minimum for wholesale is $5,000.
While the threat might be real, it’s worth considering what the fallout might be.
Should the real target remain the personal positions and earnings of the directors and executives who are responsible for ensuring such wrong doings can’t happen.
A collapsed major bank will affect shareholders, borrowers and customers with savings in many different ways. Many super funds are also investors through share holdings. Shareholders traditionally carry the risk of bad business decisions. Modern banking is a complex business with the inner workings well hidden from public view. In response to that need the government has APRA and ASIC to assist in ensuring it all goes as it should.
Government, the responsible ministers and corporate regulators are also accountable for the failings within our big banks. Should they too be bankrupt or their leadership punished at law?
This is possibly the least concerns. The main concerns would be the destabilisation of the Australian economy and whole of the Australian financial industry…and could be Australia’s own GFC. One has to remember that these were one of the main impacts of the GFC to which the world is still recovering and ongoing Government policy is trying to correct.
Those would be legitimate concerns, but Iceland took a more aggressive position when their banks went off the rails. Of course Icelandic pollies seem more attentive to governing rather than Dorthy Dixing back and forth and taking its pay and perks and rorting along protecting their MPs’ personal interests, but.
The failure of the Banks was such that they could not be allowed to continue. They were Bankrupt not just in terms of money but in terms of morals. Yes it would hit Australia hard but we need that distress to make the populace understand fully the consequences of the unabated Financial Institutions Greed. People will then really require real action to address the issues, it will cause many pollies pain as it should. Once we have that fall we can do what Iceland did which was to basically forgive Household Debt (understanding that this came about by very poor financial decisions by Banks) as required. It took a few years, a few imprisonments, a fall of a Govt, and changing of the Laws but now they have much more honest, accountable and rigorously run Finance industries & Govt (with many more women on the Boards, Govt, and in management).
Hmmm doesn’t lack of morals and poor financial decisions sound eerily familiar about Australian Corporations, Govt etc.
From the article linked by @PhilT is this piece that so easily also covers our Banking system here:
""Now in the US, the banks are even larger than they were pre-2008. They are not only too big to fail, they are too big to manage and possibly too big to exist. The old phrase was, ‘Main Street will never again bail out Wall Street.’
“That’s a noble claim, but the evidence suggests that in the UK and the US, and also in the eurozone, where several countries simply have broken banking systems, the taxpayers are still on the hook. Very little has been done, and the day of reckoning is potentially around the corner.”"
I think the current exposure of Banking non compliance and Govt inaction over years shows the above to be a true and accurate statement of our systems here. They need to be shut down, we need to suffer pain so that we have a clean slate and never allow the same again.
Hang on a minute! Who actually said that? Did anyone actually say that? Did anyone at NAB actually say that?
I must admit that I am finding the ABC’s latest penchant for headline abuse a little tiresome.
Notice how the “title” fetched by the Choice forum (from the <meta name=“title”/> tag) does not match the title from the <title> tag, which does match the headline in the article, and the former is somewhat misleading.
So who actually said this? Reading the article: One unidentified, anonymous “small investor”, whose qualifications and credentials to make such a claim are not listed.
NAB did not make such a claim.
The maximum penalties at law are often so extreme that, yes, it is theoretically possible for the regulator to send a bank insolvent (NB: not bankrupt) - and that would have negative consequences in the wider community but there are many obstacles between the claim and the truth.
NAB did not make such a claim
You would hope that regulators would be proportionate in the penalties that they would pursue i.e. exercise good judgement and commonsense so that the punishment fits the crime. Typically you would be looking at a penalty that is a modest multiple of the ill-gotten gains.
Even if the regulators don’t exercise good judgement, the court can rein in the excesses of the regulators because it is the court that determines the actual penalty, not the regulators. (You can bet also that a penalty that would force a company into insolvency might as well be appealed all the way to the High Court. No point not doing so.)
When I arrived in Australia my first accounts were with Westpac. They invited me into see a financial consultant who got my information to recommend banking and investing strategies, and he dutifully entered them into his notebook.
After a few minutes of chat he realised that although I had only been here a few days I was far from a novice and already knew BT had a ‘reputation of significant underperformance’, to be kind. He said/questioned, ‘I presume you are only interested in investments with good track records of return.’ That was effectively the end of the meeting.
The new Federal Government created Financial Adviser Standards and Ethics Authority (FASEA) is opening for business.
Whilst having the words Financial Adviser and Ethics in the one sentence seems like a contradiction in terms, hopefully they will sort out the wheat from the chaff.
Yes, let us all hope they act for our protection and don’t become another lax, fault rubber stamping, under-funded Govt arm that ARPA, ASIC and others have often shown themselves to be. Often we get mighty edifices on the outside but the corridors are crashing down on the inside.
I’m disappointed that they didn’t just ban commissions
According to research house Investment Trends, 40 per cent of financial planning industry revenue now comes from fixed fees or hourly rates.
which would have accelerated this trend.
With no commissions, conflict of interest almost completely goes away. You could still get bad advice but at least you will know that that resulted from incompetence or bad luck rather than conflict of interest.
Instead, the approach that they took - the “one word” in the article title - looks like being a lawyer’s picnic, or as the article says:
A long and ignoble history of proudly fleecing its customers? It backgrounds the funding for this. Maybe their senior staff are aspiring pollies? If they stood for office would political standards go up or down?
The banks have certainly learned something from the lead up to and then the RC, but probably not what any of us outside their executive floors (and shareholders) hoped for.
While an unproven class action at this time it gives pause that their games are not going to stop, only change character.
