In April the Royal Commission will be setting its sights on the financial advice industry, with a hearing to take place on the 16th. The public hearings will focus on consumer lending practices regarding credit products, including credit loans, home loans, and car loans.
The hearings will use case studies involving NAB Introducer Program and fraudulent home loan applications, Westpac car finance practices, Citi’s impositions of international transaction fees, and the Commonwealth Bank's accreditation of brokers.
A list of witnesses includes NAB executive manager of growth partnership Anthony Waldron, Financial Rights Legal Centre coordinator Karen Coz, NAB executive general manager of consumer lending Angus Gilfillan.
The Royal Commission has received 1,894 public submissions, most of which focus on banking, followed by superannuation.
The Financial Ombudsman Service (FOS) recently suggested that, since early 1012, financial advisers account for over a third of all serious misconduct issues. These investigations involved instances of grossly negligent, fraudulent, and wilful breaches of the law.
Only five per cent of the investments and financial advice disputes accepted by the FOS happened over the last decade. The most common issues being failure to follow customer instructions and provisions of inappropriate financial advice.
FOS stated that inappropriate financial advice can result in consumers suffering loss and investing in unsuitable products that they are unable to support financially, to their future detriment.
Fifty-five per cent of all unpaid determinations involve financial advisers, which adds up to $14 million in compensation yet to be paid as at 31 December 2017.