Editor’s letter
The release of the final report of the banking royal commission has certainly gone some way to resolving investor uncertainty. But did it go far enough for everyone?
Some victims of misconduct have suggested that the commission should have named and shamed. Some analysts have suggested that it’s actually a win for the banks in that the recommendations won’t have a big financial impact on them – vertical integration has been left untouched.
Investors clearly liked what the report recommended as the big four banks saw solid share price gains, pushing the S&P/ASX 200 to close at 6005.9, the highest point since October last year. At the time of going to the printers, though, the reality of slowing credit growth has caused investors to be cautious again, with all four down by as much as 2% after surging by 7% following the release of the final report.
Overall 76 recommendations were made by Commissioner Kenneth Hayne, along with 24 referrals to regulators for potential civil and criminal misconduct. While the government has agreed to take action on all recommendations, the most controversial involves mortgage brokers: borrowers rather than lenders should pay the broker for their services and lenders would be banned from paying trailing commissions to brokers for new loans. You can read more about this in the Buzz (page 12) while our cover story takes a look at what impact the report could have on super.
As Kirby Rappell from SuperRatings points out in his royal commission wrap-up: “We see the report as a step in the right direction … All Australians need to listen up and pay attention as the decisions they make now regarding their superannuation will affect them later in life.”
On a personal note, I am super excited about my book, A Real Girl’s Guide to Money: From Converse to Louboutins, available on March 1. It’s for every woman who has that voice in her head: “How can she afford that? Where the hell is my money going? Will I ever be able to afford a home?”
You’ll find an extract on page 50. Don’t worry, though, if you’re not into Louboutins: the strategies work just as well for men.
Effie Zahos, Editor, Money magazine