A new survey finds almost two-thirds of Australians do not trust financial advice from the big four banks.
A report by the Customer Owned Banking Association, which represents credit unions, building societies and mutual banks, revealed 62 per cent of Australians had “little or no trust in the big four banks to give financial advice”.
It showed 86 per cent of survey respondents want more transparency and clarity regarding rates and fees, while 54 per cent want more competition.
This week the Financial System Inquiry (FSI) completed public hearings around the country with its head David Murray on Thursday lamenting the complexity of the financial advice system.
He indicated that the FSI’s final report due in November could include changes beyond the Future of Financial Advice (FoFA) reforms on the way banks pay advisers.
“While it is simplistic to say people don’t die from their financial services, if they are badly designed, what has been very clear to us in the public forums we have held, is the degree of suffering from people who do lose substantially is very significant,” Mr Murray said.
Speaking at the Centre for International Finance and Regulation conference, Mr Murray said the system needed to provide better incentives for product providers to build trust with their customers.
Acting COBA chief executive Mark Degotardi said people were “confused and uncertain about banking products they are investing in and advice they are getting”.
“As Australians drop the kids off, do the shopping or go to work, they probably don’t think much about the FSI.
“But this inquiry is going to set up the rules for our banking sector for the next 10-15 years so it vital that consumer views are taken into account.”
With four per cent of respondents believing there should be less banking regulation, Mr Degotardi called for better regulation to increase competition.
“Big four banks dominate the market partly because they play under rules that are unfair to other competitors,” he said.