Call for financial services inquiry
AUCKLAND: New Zealand should have its own inquiry into the financial services sector, says Sam Stubbs, the founder of lowcost KiwiSaver provider Simplicity.
The call comes as a raft of scandals has emerged from Australia’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, including fees that were charged for no advice by AMP and to clients who were dead by Commonwealth Bank of Australia, the parent of ASB bank.
Mr Stubbs, who has previously worked in the insurance and banking sector, said the misconduct in Australia was now too big to ignore here, especially when many of the same companies operated on both sides of the Tasman.
He said the commission ‘‘has been a huge embarrassment for many’’.
‘‘Stories about industry bad practices have moved from the business section to the front page of the papers.
‘‘The growing litany of misconduct includes selling products costing more, yet with fewer benefits, incentives that rewarded giving poor advice, and even charging dead people.’’
Mr Stubbs said the time had come for a similar examination of New Zealand’s financial industry.
‘‘Politicians, regulators and the industry in New Zealand have been vocal in saying that a similar inquiry is not needed.
‘‘If a commission of inquiry in New Zealand really isn’t necessary, why make such a noise about it?
‘‘I think about these things pretty simply. If there really is nothing to hide, shouldn’t the industry welcome a commission of inquiry? Surely they’d want to be proved as good as they claim to be?’’
Mr Stubbs said the main reason offered for why New Zealand didn’t need an inquiry was that regulations differed here.
‘‘Does the industry really want us to believe that, in spite of everything going on in Australia, nothing needs to be done because our regulations are different? Different is not necessarily better.’’
He said the other reason given was that there weren’t enough examples of wrongdoing to merit an inquiry.
‘‘They all need to look over the ditch, because that was exactly the same reason used in Australia, and it was wrong.
‘‘We all hope it’s different here, but let’s assume nothing and find out the truth.
Mr Stubbs said New Zealanders had hundreds of billions of dollars at risk through mortgages, KiwiSaver, insurance and savings.
‘‘We should know if our industry is doing the right thing, once and for all. If that costs the Government time and money, so be it. It’s worth it, given all the money we trust the industry with.’’
Prime Minister Jacinda
Ardern has left the door open to a banking inquiry in New Zealand. — NZME