Day 544: 'Performing poorly'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 544.
Today in summary: APRA has put conditions on AMP Super amid ongoing concerns over the company's compliance with super rules; ASIC has confirmed ANZ has complied with a phase out of its fees-for-no-service; FASEA has approved courses for a first round of graduate diplomas and bridging courses; the class action against NAB insurance has been expanded to include insurance for personal loans; and Treasury has put the hard word on banks over adoption of its open banking regime.
-- Alex
@AlexESampson
Current banker panic level: 👮♀️👮♀️👩🏻🎓👮♀️😡
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APRA has issued directions and new licence conditions on AMP Super amid ongoing concerns over the company's compliance with the super act. The prudential regulator wants AMP Superannuation Limited and NM Superannuation Proprietary Limited to address a range of issues identified during its ongoing supervision of the company, including delivering better member outcomes via “significant changes” to its practices.
Shares in the embattled wealth manager fell when the conditions were announced.
The corporate regulator says ANZ has complied with an enforceable undertaking over its compliance to fee-for-no-service rules. ASIC has monitored “the phasing out” of an ANZ services embroiled in scandal, exposed by the royal commission, where customers were charged fees for services they did not receive.
ANZ is the latest of the big four to comply with an enforceable undertaking to change its systems to adhere to better practices. ANZ entered the agreement in March and completed its audit on May 31, with ASIC approving its compliance. The bank’s remediation to wronged clients must be completed by mid July.
ANZ will no longer offer its “Prime Access” service to new customers and will phase it out for current customers over the next 18 months. ASIC will monitor the phase out process.
The Australian | AFR | SMH
The Financial Adviser Standards and Ethics Authority has approved courses for a first round of graduate diplomas and bridging courses from higher education providers as part of its increased education standards for financial advisers. FASEA approved the programs and courses in line with its required curriculum and standards.
The Slater and Gordon class action against NAB and its insurance arm MLC has been expanded to include insurance for personal loans. The law firm alleges thousands of customers were sold “worthless” credit card insurance.
The class action was issued in 2018 on the back of the banking royal commission.
Slater and Gordon was today granted leave by the Federal Court to expand the claim beyond credit card customers, to include people who were sold a similar type of insurance for personal loans.
Federal Treasury has told the major banks it expects them to be ready by February to use the government's open banking regime, according to reports in the AFR. The process slowed when the necessary legislation to run a trial in July failed to pass before the election.
Treasury today released the second version of a draft Designation Instrument for the application of the Consumer Data Right, and it’s now open for consultation until July 12.
The open banking trial was to begin on July 1. Real customer data was supposed to flow from February 1. The Australian Banking Association told Australian Banking Daily before the election if the bill didn’t pass before May 18 the implementation of the Consumer Data Right would be delayed.
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Today’s burn prize: CountPlus CEO Matthew Rowe
“I think we’d all acknowledge it wasn’t a great investment for CBA.”
Rowe was discussing the news Commonwealth Bank will sell its financial planning business Count Financial to ASX-listed subsidiary trust CountPlus for a bargain basement A$2.5 million, after buying it in 2011 for A$373 million.
The Commentariat
Recent jobs data will push the RBA closer to another rate cut, writes Shane Wright in the SMH, arguing the gap is widening between what the central bank and policy makers want and what they're getting.
“Compared to our international peers, Australia's job market is performing poorly. The jobless rate is 3.6% in America, 3.8% in Britain, 4.2% in New Zealand and 2.5% in Japan. More worrying for the RBA, our under-utilisation rate (the number of unemployed and underemployed as a percentage of the labour force) is off the charts. In May, it stood at 13.7% while over in the US it is just 7.1%.”
Kablamo CEO Angus Dorney questions how disruptive neo banks actually are in The Australian.
“Financial services executives need to monitor the nascent neo banks closely and keep pace with their hunger for innovation. By learning from the media industry, they can get ahead of shaping the inevitable change before it’s too late.”
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