In a press conference last week, CBA chief executive Ian Narev announced an ‘Open Review Program’ to investigate a series of advice failures at CBA dealer groups Financial Wisdom and Commonwealth Financial Planning.
Governance Institute chief executive Tim Sheehy said CBA’s “gesture is too little, too late”, with a Royal Commission the only suitable response.
“Their proposed actions may have some impact in lifting the company’s internal standards, but what about the rest of the industry?” asked Mr Sheehy.
There are “systemic problems” in the financial advisory industry generally – not only at the CBA, he said.
“We continue to see example after dramatic example of the damage conflicted advisers can unleash at tremendous financial and personal cost to investors,” Mr Sheehy added.
“Let’s not forget that the last Royal Commission into a private corporation was the HIH inquiry and it is widely accepted that its positive impact has been substantial,” he said.
According to Mr Sheehy, the corporate failings revealed within CBA, Storm Financial, Westpoint and Timbercorp are of a “similar magnitude” and also warrant a Royal Commission.
“We hope the current government will heed the public call for a similar process as a result of the CBA’s findings,” he said.
“Australians are asked to fund their own retirement. To facilitate that, we must create an environment where it is safe to do so.”
