Day 473: 'Time to move forward'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 473.
Today in summary: Superannuation bill to protect members finally gets across the line; ASIC welcomes new powers to intervene when products are being flogged to the wrong customers; and Westpac’s Viridian deal looks decidedly shaky.
-- Charis
Current banker panic level: 🙄🤑😰
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Parliament has, in its 11th hour, passed a bill to improve accountability and member outcomes in super, more than 18 months after it was first introduced. The Bill saw many amendments on the way through, but in its final form, enforces the Hayne recommendation to stop super funds offering inducements to employer groups; enables performance benchmarking of MySuper products; and gives more power to APRA to crackdown on the trustees of underperforming funds.
APRA welcomed the passage of the legislation. Deputy chair Helen Rowell said:
“The new directions power gives APRA the ability to intervene at an early stage before members suffer significant harm.”
ASIC has welcomed yesterday’s passage of legislation to allow it to intervene when customers are being sold products that aren’t appropriate, as recommended by the 2014 Financial System Inquiry.
The new rules, which will require banks to identify in advance the consumers for whom their products are appropriate, and direct distribution to that target market, will be phased in over two years. ASIC chair James Shipton said the new powers would:
“provide invaluable assistance to ASIC as we all seek to rebuild the community’s trust in our banking and broader wealth management industries. And we note the overwhelming level of support this attracted from across the Parliament.”
Westpac’s plan to sell off its financial planning arm to Viridian seems to be coming off the rails, according to a report in The Australian. Westpac didn’t comment on the report, which suggests fewer planners will be moving across to Viridian, making for more redundancies.
Today’s burn prize: Former IOOF chief Chris Kelaher
🔥🔥🔥
“It is time for IOOF to move forward under new leadership.”
After stepping aside while the wealth management firm “vigorously” defended a case brought by APRA to disqualify him as a trustee, Kelaher will now walk away with a A$1.3 million payout in lieu of notice.
The Commentariat
The departure of IOOF chief Chris Kelaher is part of the beleaguered wealth management firm’s need to show a new regime is in control, writes the AFR’s Chanticleer.
“APRA says that IOOF consistently fought the regulator’s attempts to pull the firm into line. As Kelaher's royal commission evidence suggested, the regulator’s view was simply that – an opinion.”