The final round of the royal commission may just be the most exciting round of hearings yet for members in the industry, says QMV consultant.
QMV’s principal consultant legal & risk Jonathan Steffanoni told Investor Daily said that the next round of hearings would be a time to reflect on the issues brought up in previous sessions.
“The focus of the next round of hearings is on policy questions arising from the previous hearings. I don’t think you’re likely to see much new material for misconduct but at the same time in many aspects it’s the most interesting round of hearings,” he said.
Mr Steffanoni said that for those in the industry the next round would finally provide some insight into what policies may come out of the commissions.
“Those working within the industry, it’s the most interesting round of hearings. We get to look at what those policy responses might be,” he said.
It was important though to remember that this was a commission on misconduct and that many parts of the system work, said Mr Steffanoni.
“A lot of the system works well. We tend to focus on the problems but there are large parts of the system and regime that do work quite well,” he said.
Mr Steffanoni said he didn’t expect there to be many crazy recommendations that would be hard to swallow in the industry.
“Hayne is a smart guy, he’s not going to want to create instability in the system. So, I think we are likely to see sensible recommendations,” he said.
QMV’s managing director Mark Vaughan echoed Mr Steffanoni’s thoughts and told Investor Daily that the significant change was already underway in the industry.
“There is already significant change underway and you don’t want to lose sight of that. There is change that has nothing to do with misconduct and it shouldn’t take a backseat to the commission recommendations,” he said.
Mr Vaughan said the federal election would play a part in how the recommendations were implemented but it wouldn’t be a sudden explosion of change.
“There will be some support from both major parties on some of the recommendations for some of the Hayne recommendations, the differences will be in some of the nuances,” he said.
Looking forward the industry will probably not look that different over the next couple years said Mr Vaughan as there would be a period of clean up.
“Huge corrective activity needs to take place. We always have a tendency to think things will happen faster than they actually do,” he said.
What this could do is open the industry to new players who were able to innovate immediately said Mr Vaughan.
“The next two to three-year window will be looking back before looking forward for innovation. Perhaps what that does is open the market up to new players who don’t come with all the baggage and legacy issues,” he said.
Mr Steffanoni said the immediate effects would be felt in how the regulators dealt with the industry.
“What change we are going to see that doesn’t require any legislation is regulators and their enforcement. They will want to be seen as the tough cops so that may change sooner rather than later,” he said.
Mr Vaughan agreed and said the mistakes seen in the royal commission by the regulator were unlikely to be seen again.
“I doubt anyone from ASIC will be saying to anyone in a big bank in the next six to nine months ‘what do you reckon about this penalty. Are you ok with that?’” he said.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]