Day for Australian banks as bombshell inquiry report set for release

AMP has blamed its advisers for its massive fees-for-no-service issues

AMP has blamed its advisers for its massive fees-for-no-service issues

The Australian government is due to release on Monday the final recommendations of the independent inquiry that exposed systemic wrongdoing in Australia's financial sector past year, likely leading to sweeping changes to the country's banking industry.

With institutions and their shareholders braced for a major shake-up when the final report and the Morrison government's response is made public after financial markets close on Monday, the chief executive of the Australian Banking Association, Anna Bligh, said banks had "not lived up to the high standards Australians rightly expect of the industry".

The Royal Commission final report has been released to the public and outlines recommendations from Commissioner Hayne.

While Mr Hayne declined to name individuals or companies that might face prosecution, political correspondent Michael Pachi told Tom Elliott there was one bank which received damning criticism.

"Providing a service to customers was relegated to second place".

After the report was made public on Monday, Treasurer Josh Frydenberg said the public had paid an "immense" price for the misconduct.

It found shocking evidence of misconduct and greed in the Australian financial sector, at the expense of customers and businesses.

While the Finance Sector Union said "these are mostly cosmetic changes rather than structural".

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It also recommended that trail commission be entirely phased out over a period of two or three years.

"He just gave them a blast, it's the only bank, only institution that he really gave a blast to".

While it proposed brokers be subject to a best-interests duty and for trailing commissions and "other inappropriate forms of lender paid commissions" to be banned from 1 July, 2020, it is planning for a review in 2023 about whether upfront commissions should be removed and brokers moved to a "borrower pays" system.

In financial planning, Mr Hayne recommended planners must seek an annual renewal of all ongoing fee arrangements, where clients are sent a list of the services they should be provided and must agree in writing to pay the fee.

Misconduct reached into the sector's upper echelons, with top wealth manager AMP Ltd engaging in board-level deception of a regulator over the deliberate charging of customers for financial advice it never gave.

The Royal Commission was a quasi-judicial independent body led by a former high court judge that was tasked by the government, reluctantly at first, with investigating financial sector misconduct following a string of banking scandals.

The insurance sector is facing the prospect of further restrictions to its sales practices, with Mr Hayne proposing anti-hawking laws be extended to the sector.

Under particular threat are funeral insurers, with the commissioner recommending they be regulated as a financial product.

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