Financial advice scandals behind low public trust of Australian major banks

By Kirsty Timsans ·

Public trust in both the major banks and the commitment of their boards to put member’s interests first remains low in Australia, a recent Industry Super Australia survey has shown.

According to the survey findings, 71% of the 1000 Australians surveyed agreed that ineffective management by the major banks was behind the recent financial scandals.

Chief Executive of Industry Super Australia, David Whiteley, said that the findings captured the extent of mistrust among Australians of major banks, considering recent financial advice scandals around poor financial advice involving the Commonwealth Bank, ANZ, NAB and Macquarie Bank.

“Over the last decade, the big banks have had to pay millions of dollars to customers in refunds, compensation or settlements and have been the subject of investigations and other enforcement action by the regulator and police,” he said.

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Last year, Commonwealth Bank Chief Executive Officer Ian Narev issued an apology after a Senate report found that customers lost hundreds of millions of dollars when financial planners put their money into high-risk investments without their permission.

A clear majority of respondents (65%) also said that bank-owned super funds were overly focused on making a profit at the expense of their customers’ retirement savings.

In fact, Whiteley said banks and bank-owned super funds are campaigning to reduce consumer protections for people that rely on financial advice as well as lobbying to change the character and structure of industry super funds.

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