Westpac chief believes in financial advice

Westpac chief executive Brian Hartzer told members of parliament that he believes providing financial advice to Australian consumers is important and that all Australians should have access to good, cost-effective, unconflicted financial advice.

Speaking to the House of Representatives Standing Committee on Economics Hartzer also said he regrets having to exit the financial advice business.

"We concluded that it was uneconomic to meet all the compliance around it and earn a reasonable return.  I regret that," Hatzer said.

The Westpac boss also warned of the effects of growing "red tape" which he said is restricting business investment.

Next year, Westpac will spend around half of its investment budget staying on top of regulatory obligations, he said.

"In 2020, we expect to spend $800 million on regulatory and risk-related change which is 50% of our investment spend," Hartzer said.

He also added that the bank has refunded around 60% of known issues that arose following the Royal Commission and warned that there may be further remediation costs to come.

Commonwealth Bank chief executive Matt Comyn also fronted the committee and said he believes non-bank entities should face the same level of scrutiny as the big banks.

"There have been lenders able to lend into pockets of the market the regulated financial institutional haven't been and that supports a broader policy and agenda that supports competition," he said.

"So there are views on both sides, but if you asking me as chief executive of Commonwealth Bank then of course I'd prefer it to be neutral regulatory environment across all competitors."

The bosses of NAB and ANZ will also face the committee.

The chair of the committee, Tim Wilson MP, said the hearings are an important mechanism for the Parliament to publicly scrutinise and hold Australia's four major banks to account.

Wilson said: "The committee's scrutiny will include examining the four major banks' progress in implementing the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.'

"Given the widespread misconduct across the financial services sector identified by the Hayne Royal Commission, it is important that financial institutions are held accountable and to ensure that they make the crucial improvements needed to start restoring trust in our financial institutions."

Read more: WestpacBrian HartzerCommonwealth BankNABHayne Royal CommissionTim Wilson MPANZBankingHatzerMatt Comyn
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