Dodgy financial planners are still working in the industry despite being sacked for providing clients with dishonest advice, executives from the big banks have told a senate committee.
Senior executives from Commonwealth Bank, ANZ, NAB and Macquarie answered senators’ questions in Canberra on Tuesday, and all admitted that advisers they had sacked had found advice jobs at other firms.
In response to a grilling from Nationals Senator John Williams, Commonwealth Bank group executive of wealth management Annabel Spring said: “I know of planners who we have terminated who are now working at other places.”
NAB Wealth group executive Andrew Hagger responded: “A number are still in the industry.”
Macquarie Group chief executive Nicholas Moore said: “We don’t keep track of the staff after they leave. I have heard that some are still working in the industry as financial advisers. We’ve breach reported the advisers to ASIC.”
Senator Williams – who has made the systemic issue of poor financial advice one of his main concerns – compared dishonest financial advisers to “paedophile priests” who leave one parish under a dark cloud, only to pop up in another one. He suggested that banks ought to put the names and offences of sacked advisers on the national adviser register.
ANZ deputy chief executive Graham Hodges admitted that some sacked advisers may still be working as advisers.
However, he did not accept that it was ANZ’s role to publish their offences on a public register.
“I’m not sure that in all cases you would end up with natural justice there,” he said.
Generally the banks’ executives went out of their way to express remorse for the misconduct of previous years, the true extent of which is only beginning to emerge.
Commonwealth Bank chief executive Ian Narev was most contrite, beginning his statement by saying: “I apologise once again to customers who had poor advice.”
He admitted that the bank “acted terribly” in one particular case.
He said that 43 advisers had been sacked or resigned during investigations over the last five years. However, so far only three victims of bad advice out of thousands have been compensated for damages. Over 200 have so far been made offers of compensation, at an average value of $15,000.
Mr Narev’s contrition did not persuade former Commonwealth Bank adviser and whistleblower Jeff Morris, who called the bank’s current compensation scheme “a hoax”.
Mr Morris also attacked the Australian Securities and Investments Commission (ASIC) for its failure to regulate effectively.
“ASIC is a weak and hesitant regulator. We all know what happened at school when there was a weak and hesitant teacher: the naughty boys played up.”
He renewed his calls for a Royal Commission into the big banks’ financial advice businesses.
Another victim of bad advice gave evidence to the senate committee, saying there was an “incestuous relationship between financial institutions, the government and ASIC” calling it “an unholy trinity”.