We’ll end the coverage there. Check in on the Guardian Australia homepage for further updates, but here’s a summary of the day’s key points prior to McMaster taking ill.
- Head of Dover Financial, Terry McMaster, has defended the company’s hiring of financial advisers who were under investigation and later sanctioned for serious breaches.
- McMaster was also questioned over clauses in Dover’s client protection policy which actually absolved its advisers of responsibility for bad conduct.
- Dover appears to have not properly answered a notice to produce documentation from the commission, by supplying a truncated spreadsheet logging when staff reviewed statements of advice, instead of the full information. The spreadsheet contained no names.
-
Dover Financial was the only large-scale financial advice group to decline to assist the royal commission.
- McMaster advised the company to retain him as a lawyer to review its statements of advice and “add gravitas”.
- Dante De Gori, the chief executive of the Financial Planning Association, defended the lack of resolution on a March 2017 complaint against celebrity adviser Sam Henderson.
- De Gori also defended FPA practices that saw Henderson talk with both the investigator of the complaint and the FPA head of professionalism.
- The FPA continued to suppress the identities of expelled or suspended members for years after a change to its constitution that ended the standard practice.
-
The FPA asked the royal commission to keep Henderson’s name suppressed in order to protect its processes and Henderson’s reputation.
- The FPA budgets the same to the department of the CEO as it does to its professional standards unit with four staff.
-
Philip Kewin, chief executive of the Association of Financial Advisers, told the commission there could be a tension between promoting the industry and its aim of being a co-regulator.
- The AFA only suspended a member who was found by Asic to have engaged in misconduct and banned for five years, because it believed it would be relying on “hearsay” unless it did its own investigation.
Updated
Witness treated by ambulance officers
A quick summary of this afternoon’s abrupt end:
The responsible manager of Dover Financial, Terry McMaster, collapsed in the witness box while giving evidence and is being treated by ambulance officers.
McMaster was being questioned over clauses in Dover’s client protection policy that actually absolved its advisors of responsibility for bad conduct.
McMaster defended the “totality” of the policy – which has since been changed – but conceded the clause defended Dover, rather than clients.
The commissioner, Ken Hayne, had questions for McMaster but first warned that admitting the policy was misleading or deceptive could breach the Asic Act.
McMaster said they were aware some subclauses could be struck down.
Counsel assisting Mark Costello suggested Dover was seeking the maximum protection for itself and if some provisions in the contract were unlawful, Dover’s position was “so be it, it was worth trying”.
“That’s part of it, yes,” replied McMaster.
Costello said this was consistent with a culture within Dover that client complaints were to be fought at all cost.
McMaster said he didn’t think that was correct.
The commission’s live feed then ended.
Updated
McMaster collapses while giving evidence
The royal commission has confirmed Terry McMaster collapsed while giving evidence from the witness box. An ambulance is currently on site.
The live feed for the commission was suddenly closed off.
Fairfax reporter Sarah Danckert is reporting it was because McMaster has collapsed and an ambulance has arrived.
I’m seeking further information.
Costello is grilling McMaster over a clause in Dover policy that – until 2013 – absolved its advisers of responsibility for bad conduct.
“It is Orwellian to describe this as a client protection policy,” says Costello.
McMaster agrees but says it’s since been changed, and anyway that wasn’t the intention. It just “evolved” that way.
He thinks when you looked at the document “in totality”, then “it actually increased the protection of clients by focusing the attention on these issues and ensuring the client was actively engaged in the process and understanding the base principles underpinning it”.
Costello suggests “it’s an elaborate attempt to exclude Dover’s liability for the acts of its authorised representatives”.
“This is a Dover protection policy.”
McMaster says there are other clauses that Costello isn’t looking at which do protect clients.
Updated
There are some pretty astonishing anecdotes coming from McMaster’s testimony.
Dover left the financial services ombudsman over a dispute with a client, during which Dover warned a client – in writing – that “false complaints about financial advisers can give rise to defamation”.
He says that was not a usual course of action for Dover and was a one-off.
Updated
In his witness statement, McMaster said none of Hamilton’s clients complained about her advice.
A three-year Asic ban or disqualification, in place until November 2020, was not part of his statement.
“I think the sentence was ‘there’s no complaint’,” he says in explanation. McMaster represented Hamilton at the Asic hearing, he adds.
Costello suggests he didn’t think it was relevant to give the commission the information.
“I agree that does not look good, and I think on reflection it is,” he says, but had no deliberate intention to exclude it.
Costello suggests it was misleading to use the present tense about the lack of complaints from Hamilton’s clients when she is under a ban order and doesn’t have clients.
McMaster says it’s a wording error and not meant to mislead.
Costello isn’t having it. “It’s a complete omission of the fact that Ms Hamilton suffered the most serious consequence that can become an authorised representative and was banned by the regulator.”
“That’s correct,” McMaster says.
Updated
It’s getting heated.
McMaster is being grilled about Dover hiring Financial Wisdom adviser Julie Hamilton, who had been reported to Asic for serious compliance breaches. He was fine with this, though, because it was a problem with supervision, not a reflection on the individual.
He also says the case had “all the hallmarks” of a commercial dispute in which a licensee makes a late-in-the-day complaint, for which he is reprimanded by Costello for “trivialising the reporting of serious compliance complaints to Asic”.
McMaster rejects the proposition.
“You have just said oftentimes serious compliance concerns are reported to Asic for commercial reasons,” says Costello.
McMaster agrees and says he has seen it happen.
For context, Asic found Hamilton failed to:
- make inquiries into her clients’ financial circumstances when recommending switching their superannuation and insurance;
- consider her clients’ circumstances when providing advice on superannuation and insurance;
- give priority to the interests of her clients when providing advice; and
- disclose fees and charges associated with the implementation of her advice.
Asic banned Hamilton from practising for three years over the breaches.
McMaster says he remains “quite comfortable” with Hamilton’s advice.
Updated
McMaster is being asked about its screening processes for new advisers and in particular that of Adam Palmer.
Palmer joined Dover after leaving AMP’s Genesys, where, the commission has already heard, he would refer clients to a business of which he was a majority shareholder. His first audit at AMP earned an “E” fail grade, the commission heard. His position was terminated in 2013 but he was not referred to Asic until 2015.
During the Dover recruitment process Palmer disclosed he was under investigation.
A reference was first sought from Genesys in late December 2014, but there was a “very considerable delay” on the part of Genesys, summarises Costello. McMaster says he doesn’t believe they got a reference from Genesys.
“Why in circumstances when Mr Palmer had confessed to some of his problems ... was it important for Dover to seek a reference check?”
“Because it’s form, it’s expected and we’re required to do that.” McMaster clarifies the expectation is from Asic.
Costello: “Is there anything AMP could have said to you that would have caused you not to have appointed Mr Palmer?
McMaster: “Yes ... fraud. A detailed list of significant errors, particularly if when we looked at those errors it would be likely they’d reoccur in the future.”
Costello: “What if they’d told you he’d received the lowerst possible audit rating?”
McMaster: “Not necessarily ... because we’ve learned that what happens in the situation of an unsupervised adviser subject to volume quota KPIs doesn’t happen in our environment, where we have close supervision and support.”
They’ve had no difficulties with Palmer’s advice, he says.
Palmer has since been suspended by Dover.
Updated
Just to duck quickly back to an earlier bit of testimony from McMaster - this is interesting to say the least.
The law firm we now know was engaged by Dover - after it stopped paying McMaster as a sole practitioner on a $3,000 a month retainer - is MLA Lawyers.
Earlier questions and answers revealed MLA stands for McMasters Lo Andrawi, and it shares a business address with Dover.
Terry McMaster previously charged Dover a retainer to review advice in his capacity as a lawyer - now says lawyers on retainer are MLA Lawyers with which he has no relationship. MLA Lawyers is McMasters Lo Andrawi, at the same premises as Dover #bankingRC
— Stephanie Chalmers (@StephChalm) April 26, 2018
It turns out that a log of staff reviews of submitted advice, which Dover gave to the royal commission in response to a legal notification to produce, is actually a truncated spreadsheet created specifically for the commission. The actual data is still on Dover’s computer system and wasn’t handed over because it was “too voluminous”, McMaster says.
Costello is incredulous.
The Dover system contains staff member names. The spreadsheet created for the commission does not.
Updated
We’re back from lunch and resuming questions on the legal retainer to McMaster. That arrangement is no longer in place. Instead, Dover has engaged MLA Lawyers on retainer.
Costello is going through a document on new statement of advice processes, which says depending on client criteria, including whether they are “conservative” or not, McMaster needed to check the review.
He says this, as the responsible manager, is not as a sole practising lawyer.
He suggests the criteria is in lieu of risk profile questionnaires – which he says Asic doesn’t like – and encapsulate “best interest” duties.
“It’s a reasonable professional test that is self-assessed by the adviser who has written the advice,” says Costello.
McMaster says he reads it and the adviser “has to be right”.
Despite minutes of a compliance committee – which have been signed – saying otherwise, McMaster says they review the advice before it goes to the client.
Updated
Summary
So far we have heard from three witnesses about disciplinary processes in the financial advice industry.
- Dante De Gori, the chief executive of the Financial Planning Association, defended the lack of resolution on a March 2017 complaint against celebrity adviser Sam Henderson.
- De Gori also defended FPA practices that saw Henderson talk with both the investigator of the complaint and the FPA head of professionalism.
- The FPA continued to suppress the identities of expelled or suspended members for years after a change to its constitution that ended the standard practice.
-
The FPA asked the royal commission to keep Henderson’s name suppressed in order to protect its processes and Henderson’s reputation.
- The FPA budgets the same to the department of the CEO as it does to its professional standards unit with four staff.
-
Philip Kewin, chief executive of the Association of Financial Advisers, told the commission there could be a tension between promoting the industry and its aim of being a co-regulator.
- The AFA only suspended a member who was found by Asic to have engaged in misconduct and banned for five years, because it believed it would be relying on “hearsay” unless it did its own investigation.
-
Dover Financial was the only large-scale financial advice group to decline to assist the royal commission.
- Its responsible manager, Terry McMaster, advised the company to retain him as a lawyer to review its statements of advice and “add gravitas”.
Updated
That’s the lunch break. We’ll have a summary and morning wrap for you shortly.
There were 1,524 statements of advice over the course of a year, Costello notes, adding up to about $23 per statement of advice – not much for a solicitor’s time.
“I was paying myself, there’s no need for it to be an arm’s length payment that I’m aware of,” McMaster says.
Costello thinks he misunderstood the question. “For your time and the time of your staff in reviewing those statements of advice ...”
McMaster breaks in to say this was the third review of the statements and – later – that it is possible to review one and ensure that it complies with the duty of best interest, in less than 10 minutes based on an hourly rate of $150 or a solicitor.
The statements are five pages long.
Updated
McMaster is facing questions on a compliance meeting in 2013. He is a member of the compliance committee.
Minutes from an April 2013 meeting show McMaster advised that Dover continue to engage McMaster’s Legal to review all statements of advice, on a $3,000/month retainer.
Costello asks what McMaster’s Legal is.
“That’s basically me,” replies McMaster.
The service “added a third level of review to the review process, and to help the overall presentation of the statement of advice,” says McMaster.
“Do you mean the formatting?” asks Costello.
McMaster: “Well, if you like, the gravitas, the traction of the statement of advice, the fact that it has actually been reviewed by legally qualified people and a third check by solicitors.”
Updated
McMaster is asked why Dover declined to take up a written invitation from the royal commission to assist “by identifying instances of misconduct by Dover or any of its representatives”.
“It was phrased in terms of an invitation, which we took as not being in any way mandatory,” he says. “It was for no real reason other than that.”
Counsel assisting, Mark Costello: “Are you aware Dover is the only large-scale financial advice licensee to decline that invitation?”
McMaster: “The word ‘decline’ is strong. A better word is ‘didn’t respond’. We just didn’t realise something greater was expected.”
Costello says there was a response from his office that declined to participate.
McMaster: “Fine.”
Costello: “Was that given at your direction?”
McMaster: “I can’t recall.”
Updated
McMaster is the responsible manager of Dover Financial, one of the top 10 licensee firms by number of advisers, according to McMaster’s estimation. It has offices in all Australian jurisdictions.
It charges a flat fee of $20,000 per annum, including professional indemnity insurance, per authorised representative. It’s $12,000 for subsequent representatives from the same firm.
Updated
That ends the questioning of Kewin. Next up is Terry McMaster.
Updated
The AFA’s revenue for 2016-2017 was about $4.8m, according to its annual report.
A little under $2m came from membership, and a little more came from conferences and functions.
The main expense is staff employment – about $1.8m – Orr notes. The next biggest expense is conferences, roadshows and functions.
Orr: “What part of these expenses represents the AFA’s spending on its disciplinary function?”
Kewin points to a $790,000 line item that also covers professional services and legal costs.
Updated
Orr takes Kewin through another example and a review committee report, and says it seems the board was being asked to make a decision about disciplinary sanctions based on what would make the least reputational risk to the AFA.
Kewin doesn’t believe so.
Orr: “The important thing was to terminate the members, to expel them, wasn’t it?”
Kewin: “In both cases, I believe the essence was also to follow due process.”
Orr: “If an Asic banning order isn’t enough what does it take to get expelled from the AFA?”
Kewin says there was an appeal pending, and rather than undertaking an additional investigation, “if you suspended the member they’re no longer an active member”.
Updated
An AFA member was banned for five years by Asic in 2017 and expelled from the FPA.
An Asic investigation said, among other things, there were several instances of misleading conduct by the adviser designed to get people to switch superannuation. The adviser also engaged in misleading and deceptive conduct by failing to disclose a client’s pre-existing medical condition on an insurance form.
Despite the findings and actions of Asic and the FPA, an AFA recommendation was that to respond to such findings would amount to “hearsay” and the adviser’s membership should only be suspended, not terminated.
Orr asks if the adviser “wasn’t eligible for practitioner membership and had been banned from providing financial services, why would the AFA retain him as a member?”
Kewin: “His membership was suspended.”
Updated
The AFA has discussed with Asic about receiving notifications of compliance concerns about its members, which would be “advantageous”, Kewin says, but the regulator said they couldn’t for confidentiality reasons while investigations were ongoing.
Orr asks if the AFA has asked licensees to notify them of suspensions or terminations of members. Kewin says there is one formal agreement in place, with CBA. It was put in place before Kewin’s tenure.
Orr: “Why do you not have other formal agreements in place with other licensees?”
Kewin: “I don’t know, I can’t answer that.”
Updated
Under questioning, Kewin says the AFA is seeking to gain new members, and while they have members who are also members of other organisations he concedes there is some competition.
Orr: “Can the AFA operate effectively as a co-regulator of the financial advice industry when it is competing with rival bodies for members?”
“I believe so,” says Kewin.
Orr rephrases: “Isn’t there an inherent conflict?”
Kewin: “I don’t think so.”
Asked if it’s more desirable for a regulator to be independent of the industry it regulates, Kewin says he’s looking through the lens of what is known of professional standards and that you can have multiple codes and bodies to monitor them.
Updated
“There’s not a lot” the AFA could do for regulation that Asic or a licensee couldn’t, admits Kewin.
After several questions, he concedes there could be a tension between being a “co-regulator” and also a promoter of financial advice and advisers.
“We’ve already seen there can be tension in those relationships,” he says.
Updated
We have finished with De Gori now. The next witness is Philip Kewin, chief executive of the Association of Financial Advisers.
He’s being asked whether he sees financial advisers as professionals. He does, and he thinks clients would too. Others perhaps not, based on what’s come out over recent weeks.
The professionalism comes from the way they conduct themselves, and the advice and support they give, he says. He also believes they can be trusted.
The primary function of the AFA is to promote the value of financial advice, says Kewin.
Orr asks about the function noted in Kewin’s statement, which is “to promote ethical practice, exercise oversight over professional standards of members, and to support and protect the character status and interests of the financial advice profession generally, and the professional standing of members”.
That function was only added to the AFA’s constitution in October last year, Kewen says, after a review “to make sure it was satisfying what we believe were the needs of the profession and the customer and general public”.
Another function was added at the same time to get the AFA on the way to becoming a co-regulator of the industry.
Updated
A quick recap of the FPA’s budget:
It relies on membership fees, and it will pull in an expected revenue of $8m in 2017-18.
- $1m of that is set aside for a “professional standards budget”, which includes supporting the conduct review commission.
- $1.7m is set aside for marketing and communication, to raise awareness of the financial advice industry.
- $1m is set aside for the chief executive.
On the last point, De Gori wanted Orr to know that that $1m didn’t all go to him; it went to the “department of the CEO”, which included his staff and a bonus pool.
Orr asked: “Yes. You and your staff. How many?”
De Gori replied: “One staff.”
Updated
The FPA’s disciplinary panel has made only six determinations since January. Self-reporting is a big part of it, as are complaints. The FPA has regular meetings with Asic and may have discussions about individuals “on an informal basis”, but has no formal process of inquiring about its members.
“Wouldn’t you want to know if the regulation is investigation or imposing sanctions on your members?” Orr asks.
“Absolutely, and in some cases where we know there are reports or proceedings ... we have asked Asic,” De Gori replies.
Orr: “So you wait until there’s a public report by Asic and then follow up with a request for information?”
Updated
According to the FPA’s 2017-18 budget, membership revenues bring about $8m a year to the association.
A pool of money is set aside to “discretionally provide” to staff for performance bonues, based on key performance indicators. For some staff a KPI is to bring in new members.
The professional standards budget – of about $1m a year – includes four staff and supporting the conduct review commission of the FPA.
Orr suggests investigating complaints of conducting disciplinary proceedings is not one of the primary objects and purposes of the FPA.
De Gori says it’s “equal” with education, training and providing resources and services to members.
A $1.7m budget for marketing and communication is partly devoted to consumer advocacy and raising awareness of the financial advice industry, De Gori says in answer to questions.
Orr puts to De Gori that it’s difficult to promote advisers while also enacting disciplinary actions. De Gori says it’s a challenge but not a contradiction in aims.
Updated
FPA asked the royal commission to protect anonymity of Henderson
Orr reads a letter from the FPA’s head of professionalism to the royal commission:
In it the FPA reconfirms disciplinary hearings against Henderson hadn’t finished, and asks that the matter be treated confidentially as “any publication by the royal commission identifying Mr Henderson would render the CRC [conduct review commission] process worthless to Mr Henderson and cause significant damage to the reputation of Mr Henderson, undermine the process of the CRC, and damage the FPA’s relationship with other members.”
Orr asks for some clarifaction.
De Gori says he believes the first part of the statement meant that if the disciplinary process was going to have any conclusion “participation by Mr Henderson in that process would obviously not be forthcoming as a result of any publication of his name”.
The FPA was concerned Henderson wouldn’t interact with the process at all if he was named.
Asked about the line about the FPA’s relationship with members, De Gori says he thinks members would expect identities would remain confidential while the process was underway.
Updated
One FPA sanction against Henderson was that he had to pay his outstanding FPA fees.
“It’s nothing to do with Ms McKenna’s complaint, is it Mr De Gori?” asks Orr.
He replies that it’s not, but the FPA can also look at issues outside of the complaint.
Orr reads out from a document that other sanctions included reviewing current practice to ensure he was complying with FPA rules, appointing an independent expert to conduct “certain reviews” and to report to the FPA on his implementation of an action plan.
The FPA “agreed to be restrained from publication of Mr Henderson’s name” in return for compliance with the agreed sanctions, she reads out.
Threat of publication and promise of anonymity is the strongest mechanism to ensure compliance, says De Gori.
Updated
Despite a 2011 update to FPA regulations that made the publication of expelled advisors’ names standard practice, the FPA continued to keep their identities secret until at least 2014 – with names redacted on the FPA website about its actions against breaches of conduct.
Similarly, it was done with a number of advisers who have been subject to summary disposals.
Orr: “How is it possible to hold members accountable for their conduct if their identity is kept confidential when they breach the FPA’s codes and policies?”
De Gori says the FPA doesn’t have the right to stop someone practising, but they can educate members and work to “improve and change their conduct”.
Orr asks if the FPA doesn’t also have a responsibility to protect members of the public, and how that can happen if the identities of members breaching codes are kept secret.
De Gori says the FPA is protecting members by working with the adviser to improve, and the threat of exposure is still there.
“What use is this page [of breaches] to members of the public?” asks Orr.
The questioning dovetails – Orr returns to De Gori’s earlier statement that expulsion is for the most serious breaches by advisers, noting the public can’t know who committed these serious breaches in 2014.
She doesn’t look impressed.
Updated
De Gori tells the commission he thinks “expulsion” from the FPA is the most serious available sanction.
Asked what he thinks would bring this action, he says: “Any major harm caused to a client, deliberate harm, fraud, systemic breaches of the code, some very serious cases of conduct, which would mean the member was not fit for practice.”
This doesn’t take away a financial advisor’s accreditation.
Updated
De Gori is defending the lack of information the FPA gave to McKenna about the progress of her complaint – about which she wrote to them. He starts by saying the complainant could be called as a witness, and then says it’s up to the discretion of the investigator.
McKenna asked to be given the opportunity to speak before a disciplinary hearing by the conduct review commission but was told in an email that a complainant had no right to be heard.
De Gori says the complainant is heard “in the preparation of the complaint”, which then becomes a matter between the FPA and, in this instance, Henderson. He says the email – from the head of professionalism – was in that context.
Under further questioning, De Gori also defends the FPA’s stance that a complainant does not get to make any formal submission when their matter is potentially going to be “summarily disposed”.
The subject of a complaint, however, is party to discussions and agreements around the summary disposal of that complaint.
Updated
Orr takes De Gori through the regulations and processes of the FPA for handling complaints. The process includes investigation, recommendations, reviews for disciplinary action and eventually sanctions.
This hasn’t happened with Henderson, Orr notes, but De Gori says it still could.
Orr tables an email from the investigator to McKenna, dated 20 December, which CC’s in the head of professionalism. It says a disciplinary hearing is set down for 8 March.
The investigator left his role at the FPA the following day.
The investigator had recommended against “summary disposal” of the complaint, which is exactly what the FPA did, Orr says.
Updated
De Gori is being quizzed about contact Henderson made with the investigating officer and with himself, about McKenna’s complaint.
De Gori didn’t respond to an email from Henderson. He defends not telling Henderson his email was inappropriate, instead saying said that by not responding he was sending a message.
Henderson also contacted the FPA’s head of professionalism.
De Gori defends this “in terms of process that needs to be explained or if there are questions about the investigating officer himself”.
Orr asks if he does not see “the danger” in the subject of a complaint talking informally with the investigating officer and the organisation’s head of professionalism.
“But they are the ones investigating the complaint,” he says.
“That’s precisely the point, Mr De Gori,” Orr responds.
Updated
I’m just going to break in here to go back over the allegations about Henderson, which came to light on Tuesday, since that is what we are focusing on with the questioning of De Gori.
Your quick catchup is as follows:
- Henderson runs a financial planning firm called Henderson Maxwell. He is also a frequent flyer across mainstream media. He hosts a show on Sky, appears on The Project, and regularly writes for Fairfax and Money Matters.
- Through the forensic, calculated questioning of counsel assisting, Rowena Orr, the royal commission showed how Henderson gave deeply flawed superannuation advice to a thankfully astute client, Donna McKenna, whose intellect and experience as a fair work commissioner allowed her to see through the spin.
- Henderson’s advice was that McKenna roll her public sector super fund into a self-managed super fund to be managed by Henderson’s firm. It would have given Henderson’s firm thousands of dollars in fees. But the advice also would have cost McKenna $500,000 for withdrawing early from one of her public sector super funds.
- It emerged that an employee of Henderson Maxwell had repeatedly impersonated McKenna while calling her existing superannuation funds. The employee used details McKenna had given to Henderson Maxwell – her date of birth and fund membership number – to facilitate the impersonation.
- Even after being told in no uncertain terms that withdrawing from the public sector super fund early would cost $500,000, Henderson Maxwell still formally advised McKenna to do so.
- When McKenna complained to the Financial Planning Association of Australia, Henderson began contacting the investigating officer.
- He disparaged McKenna as “nitpicking” and “aggressive” and described the issue as a “storm in a teacup”.
- Henderson then asked that the investigation be kept secret due to his media profile and the potential fallout.
- He later contacted the FPA’s chief executive and told him his “peers” would be very interested in the organisation’s handling of the complaint. Henderson denied this was a threat.
Updated
De Gori is being asked about celebrity financial advisor, Sam Henderson. De Gori has appeared on Henderson’s Sky News Business show “about half a dozen times”, and Henderson is a member of the FPA.
Henderson was the subject of some pretty stunning allegations on Tuesday. My colleague described it as follows:
Through the forensic, calculated questioning of counsel assisting, Rowena Orr, the royal commission showed how Henderson gave deeply flawed superannuation advice to a thankfully astute client, Donna McKenna, whose intellect and experience as a fair work commissioner allowed her to see through the spin.
McKenna lodged a complaint against Henderson with the FPA in March 2017 but it has not been finalised, says De Gori. He’s now being quizzed on why, and roundly suggests investigations take time and it’s complicated.
“Why not just impose some sanctions on Mr Henderson?” asks Orr.
The complaint resolution process needs “confirmation and agreement of terms” by the subject of the complaint, he says.
However, he concedes sanctions could be meted out by a panel. He doesn’t fully answer why that hasn’t happened.
Updated
Our first witness today is Dante De Gori, the chief executive officer of the Financial Planning Association. De Gori has been in that role since March 2016, but had roles with the organisation prior to that appointment.
The treasurer, Scott Morrison, insists the government is cracking down on the big banks, despite calls to quarantine them from a tax cut, AAP reports.
Morrison was staunchly defending the Coalition’s actions against the banks when asked why they should benefit from company tax relief given evidence heard at the royal commission.
The One Nation leader, Pauline Hanson, is among those wanting any money from tax cuts for the banks quarantined for a compensation fund for victims of their misconduct.
But the treasurer listed a range of measures the government had initiated against the banks, including a levy on the Commonwealth Bank, ANZ, Westpac, National Australia Bank and Macquarie Bank.
“By the time, which is almost 10 years from now, that the economy-wide tax cuts reach companies at that level, the bank levy will have raised over $16bn from those five banks,” he told ABC radio this morning.
“So I don’t think people can think we have missed the banks anywhere here.”
Morrison outlined tougher penalties for misconduct, including longer jail times and increased individual fines.
There is also legislation to forever bar bank executives from working in the industry again and the regulator Asic has also been given extra funding of $124m, he said.
Updated
Hello and welcome to our coverage of the banking royal commission.
Today’s hearing will continue round two of hearings, looking into financial advice. In particular, it will be focusing on the disciplinary system within the financial advice sector.
On the witness list are chief executives from the Financial Planning Association and the Association of Financial Advisors, the responsible manager of financial advice firm, Dover Group, Terry McMaster, and a representative of the corporate regulator, Asic.
Tuesday heard some pretty damning revelations. You can read our wrap of the day here, but here’s a snippet:
National Australia Bank’s top executives complained about having their bonuses ‘shaved’ after it was discovered hundreds of NAB employees under their charge had been falsifying client documents.
One NAB executive argued it would send the wrong message to the bank’s leadership team and encourage them to sweep future scandals under the carpet.
It has also been revealed a former ANZ financial adviser advised his clients to invest in a luxury marina apartment for $1.6m through their self-managed super funds, but when it failed to sell, he siphoned off $100,000 and ANZ declined to compensate his clients.
And the inquiry heard a client would have lost $500,000 in superannuation if she had followed the advice of a celebrity adviser whose staffer impersonated her on phone calls.
Updated
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