Royal Commission seeks further disclosure over financial misconduct

Commissioner Kenneth Hayne had to repeatedly ask some of Australia's largest financial services businesses to properly explain the nature, extent and effect of any misconduct over the past five to 10 years.

Overseeing the Royal Commission into the Misconduct in the Banking, Superannuation and Financial Services Industry, Commissioner Hayne outlined his focus and scope this morning in Melbourne.

Hayne said he twice asked several banks and superannuation funds to provide responses to a series of questions before today's opening hearing - specifically around the nature, extent and effect of any misconduct over the past five to 10 years. Some of these responses fell short as businesses "could not comply with the amount of content to be reviewed and assembled" within a short timeframe.

Senior Counsel Assisting the Commission, Rowena Orr, said several themes of alleged misconduct had already emerged from 385 public submissions including inappropriate financial advice and inappropriate dealing with life insurance claims.

Orr explained there are also submissions from both financial institutions and the general public that display a frustration over the time to navigate the relative dispute resolution networks. She added there will be new themes to emerge as the inquiry continues.

From the Commission's early work, about 50% of submissions have been related to banking. Orr said 32 notices to produce documents have been issued to some financial services firms and their lawyers.

As the Commission continued its opening statements this morning, Hayne quoted the Murray Inquiry to say that Australia's financial services system must be held to the highest critical standards and culture. It must also grow by meeting the needs of its users - especially the fair treatment of consumers in that the system should perform the way consumers are led to expect or believe.

Hayne foresees that the Commission will uncover a difference in how this fair treatment is identified - specifically what industry participants see as relevant and what consumers see as relevant.

He acknowledged, as stated in the letters of patent for the Commission, that Australia has one of the strongest, most stable and most profitable banking and superannuation financial services sectors in the world.

Hayne must provide an interim report by 30 September and a full report by 1 February 2019.

This article was updated at 12.38pm.

Read more: superannuationKenneth HayneRoyal Commissionfinancial advicelife insuranceMurray InquiryRowena Orr
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