Day 451: 'May never be quite the fee bonanza it once was’
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 451.
Today in summary: AustralianSuper chief Ian Silk wants the A$2.7 trillion superannuation industry to adopt zero-tolerance for underperforming funds; the government has responded to the Senate Economics Legislation Committee report on the whistleblower protections bill and; ASIC wants financial organisations and individuals to pay their invoices on time under new regime to recover ASIC’s cost from industry.
-- Alex
@AlexESampson
Current banker panic level: 😲 ☹️ 🙁
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1. AustralianSuper chief executive Ian Silk has urged the A$2.7 trillion superannuation industry to adopt a zero-tolerance approach to underperforming funds to match the higher standards expected in the wake of the banking royal commission. In a keynote speech at a conference in Brisbane today Silk revealed a blueprint for better industry performance.
“Firstly, and most crucially, there should not be any consistently underperforming funds. This is the most important change that will benefit members.”
2. The government this afternoon released its formal response to the Senate Economics Legislation Committee report on the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017. The government agreed with most of the recommendations in the committee’s report including that the definition of journalist be changed to include journalists working for a national broadcasting service and that a whistleblower should be able to make a disclosure to any person of responsibility within an organisation. The government noted an additional Greens recommendation to offer whistleblower rewards, saying that it was also a recommendation of the Joint Committee on Corporations and Financial Services report into Whistleblower Protections, but that it would respond to the PJC report separately.
3. ASIC has called for organisations and individuals regulated by ASIC to pay their levy invoice on time to avoid penalties. It is the first year of the new regime to recover ASIC’s costs from industry. The new levy applies to any entity regulated by ASIC, including banks, superannuation trustees and financial advisors. Industry funding was a key recommendation in the 2014 Murray Financial System Inquiry. ASIC issued invoices to recover its 2017-18 regulatory costs on January 31 this year and the due date for payment is March 15.
ASIC commissioner Cathie Armour said:
“Ensuring a fair, strong and efficient financial system for all Australians is our goal and is at the heart of all our regulatory activities. The due date for payment of invoices is a significant milestone in this inaugural year.”
Today’s burn prize: Shadow Treasurer Chris Bowen
🔥🔥🔥
“36 days ago Josh Frydenberg told us tick: the Morrison Government would abolish trail commissions for mortgage brokers. Yesterday in a humiliating change of position the government simply kicked it into the long grass as being all too hard for them.”
Bowen used a doorstop in Sydney to roast the Morrison government’s backflip on trailing commissions.
The Commentariat
The Australian’s senior business commentator John Durie writes that Treasurer Josh Frydenberg’s “weak excuse” for the government’s mortgage broker commissions backflip doesn’t pass muster.
“The argument is questionable but this is election season and the government doesn’t want to be seen doing anything which can be painted as helping the big banks.”
Companies, markets and the economy commentator Elizabeth Knight writes in the Sydney Morning Herald that getting consensus on NAB's pay model will be like herding cats.
“Chronican and his remuneration board subcommittee will first need to take the temperature of shareholders about pay outcomes — thus there will be plenty of pressure on the absolute level of bonuses and not just how a scheme is structured.”
Australian Financial Review economy and policy columnist Jennifer Hewett writes that lawyers are the big winners from the post-Hayne clean-up of the banks. Hewett argues that it's clear legal services will be in high demand for mounting court cases against banks and for dealing with “radically increased regulatory assaults”.
“Thanks to the pincer movement of the Hayne royal commission and growing political outrage, the financial services industry may never be quite the fee bonanza it once was for those involved. But the legal profession seems set to make up for much of this financial deficit.”
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