Co-operation, mutualisation, innovation

Solutions to the banking crisis

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  • Published 20200203
  • ISBN: 9781925773804
  • Extent: 264pp
  • Paperback (234 x 153mm), eBook

THE MURMURED ANTIPHONY of counsels assisting, witnesses and the commissioner that fills the bulk of any public hearing is supposed to be dry. Hearings are methodical and patient, on the scale of hours and days, with revelations building slowly, quietly. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry – or the Banking Royal Commission – wasn’t unusual in this regard. It had its moments. A witness collapsed and was hospitalised upon being accused of having lied. Bank executives stumbled over simple questions, flustered by the web they had distractedly spun for themselves. But it played out, largely, as one expects royal commissions to. Scandals by calcification. Much of the testimony concerned structural problems with the sector. The incentives that bankers are paid, the failures of the regulators. But there was one instance, at least, that cut through this abstract discussion – one example of how bankers and financial advisors had lost the basic stock of their trade: trust.

Sam Henderson – a celebrity financial planner – took to the stand. For an hour prior – it must have been a long hour for Henderson – a Fair Work commissioner, Donna McKenna, had been detailing the financial advice given to her by Henderson. Poor advice, extremely poor: it would have cost her half a million dollars in savings had she followed it. Strangely poor advice for a celebrity financial advisor. Over the two hours of questioning that followed, the revelations brought against Henderson were, by the Banking Royal Commission’s pace, swift and brutal. He lied about his academic credentials in product disclosure statements. He was a part-owner of financial planning business Henderson Maxwell, which would have been the beneficiary of the poor advice given to McKenna, and had failed to mention this to her.

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