Australian Prime Minister Malcom Turnbull intends to bankers and financial advisers to provide advice to customers in a plain language and record those conversations.
The prime minister says that too many cases have been found where customers were given a secondary focus and he is not pleased and is disappointed with the outcomes of the banking royal commission investigations which has found many irregularities in function of banks and financial planners.
“Banks and financial advisers have a solemn duty to put the interests of their clients and customers first,” Turnbull said in Sydney on Saturday.
Turnbull said that the government would ensure that those companies that are responsible would be brought to account even as the Hayne commission was informed on Friday there can be criminal charges against AMP for lying to the corporate regulator.
“We will make sure this won’t happen again,” he told the Weekend West.
“Those who have done the wrong thing must be held to account – whether they are financial advisers, whether they are bank executives, whether they are directors – it is vital.”
The process that banks use for giving advice to customers needs to be changed, Turnbull has told the banks and said that is was often difficult to understand disclosure documents because they are most often prepared and written by “by lawyers, for lawyers”.
“It’s very important that products be explained in plain language and I think that we should, in 2018, be ensuring that that discussion is actually recorded,” he said.
In case something went wrong., a recorded conversation could help in fixing accountability.
“If an issue arose, you would be able to see whether the adviser actually did do the right thing or not,” he said.
Turnbull has refused to take any responsibility of the misconduct done by banks and financial institutions even though he accepted that it was a political mistake that he had not started the royal commission sooner.
“The responsibility for wrongdoing lies with the people who did the wrongs. Let’s be clear about that,” he said.
Following the acceptance of the Australian Securities and Investments Commission that it had negotiated instead of prosecuting the cases of misconduct and had initiate just one criminal case in the last ten years, a call for overhauling of the corporate regulator was given by the Liberal MP Sarah Henderson.
“Asic’s duty to the Australian people is to be a feared and effective regulator, and on that score it has fundamentally failed,” Henderson said on Saturday.
(Adapted from TheGuardian.com)