The fallout from the banking Royal Commission is ongoing as organisations in the Australian financial sector come to terms with new changes, and the government continues to consider others.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry commenced in late 2017 before the Honourable Kenneth Hayne AC QC.
The intent of the Royal Commission was to examine some of the egregious and greedy behaviours which had been perpetuated in these industries for some years.
Let’s look at some of the misconduct the Royal Commission uncovered, and how losses may be redressed.
Types of misconduct arising from the Royal Commission
Some of the most concerning matters which were revealed as a result of the Royal Commission included the sale of ‘junk’ products, including insurance policies which could never have been claimed on by the purchasers, the charging of fees for no service by several entities and various other types of financial misconduct.
One of the types of misconduct identified included the provision of negligent or incorrect financial advice by financial planners or investment advisors.
This includes undisclosed financial interests by advisors in the products they were recommending to their clients, the provision of incorrect or inappropriate information or the inclusion of poorly described and veiled commissions and other secret charges
Adverse financial consequences for clients
These types of misconduct can, and on occasion have, resulted in very real financial consequences for unfortunate clients.
This includes people who have found themselves underinsured or with access to insurance products they cannot rely on in times of real need, clients who have paid excessive amounts of money for inferior products and customers who have ended up holding financial products which do not adequately meet their requirements.
Mechanisms for redress
As a result of the Royal Commission, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have increased their powers and are becoming increasingly focused on preventing bad behaviour amongst holders of Australian financial licensees and their authorised representatives.
In doing so, the corporate watchdogs are focusing on diminishing and remediating any consumer harm that has occurred as a result of the actions of financial services licensees, whether on an individual or systemic basis.
In addition to taking action through either corporate regulator, those who believe they have suffered as a result of the actions of their financial planner or advisor can also take action through the Australian Financial Complaints Authority, a quasi-tribunal which hears and adjudicates on matters relating to financial misconduct.
Depending on the nature and type of losses sustained, clients who have been affected by financial professional negligence may also choose to take formal action through the court process.
This could be based on a variety of different causes of action, including formal claims of negligence, breach of contract, misrepresentation, fraud or commercial misconduct, to name a few.
Obtaining expert advice
At Pentana Stanton, our experienced lawyers can help you quantify your losses and advise on how best to find a solution to your situation. Contact us to find out how we can help you find your way through the minefield of redressing losses post-Royal Commission.