Kiwi banks not dodgy?
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New Zealand’s big four banks’ parent companies have been found to have mistreated their Australian customers and commentators say consumers should be sceptical of claims things are ‘‘different’’ here.
Australia is conducting a royal commission of inquiry into misconduct in its banking, superannuation and financial services industry. The inquiry has uncovered serious cases of misconduct, including dead clients being charged for advice.
The Dominion Post asked the banks whether customers could trust that the same would not happen here, given that New Zealand was often a training ground for Australian banking executives, and that trans-Tasman operations tended to share senior management structures.
In response, the banks said the problems of Australia did not apply here. But economist Shamubeel Eaqub said customers had no reason to trust that and there should be an inquiry.
Eaqub is an independent director of non-bank KiwiSaver provider Simplicity. He was sick of hearing New Zealand was ‘‘different’’ – if the incentives applied to staff were the same, it should be expected there were similar problems, he said.
‘‘What’s the harm in having a targeted inquiry to find out?’’
David Whyte, a former managing director of AIG Life in Australia and a former general manager of AIA in New Zealand, last week said the culture in a multinational organisations tended to be driven by the same metrics, same performance measures and same expectations of shareholder value, in all the countries they operated in.
Eaqub said banks and financial product providers should not be in the business of giving advice as it often amounted to selling products from their own stable.
‘‘I don’t think financial advice should be able to be given by anyone affiliated with a product provider. Vertically-integrated organisations [which produce and sell financial products] are so riddled with conflicts of interest, you can’t get away from it.’’
Commerce Minister Kris Faafoi did not think New Zealand had the ‘‘extremes of behaviour’’ seen in Australia and said there was no evidence to suggest an inquiry was needed on this side of the Tasman.
‘‘New Zealand is a different environment and I have seen no evidence that these incidents are being replicated here,’’ he said.
‘‘We have organisations including the FMA [Financial Markets Authority] providing oversight and they are monitoring the Australian royal commission as well as engaging with the businesses involved who have New Zealand operations.
‘‘At this time I am not aware of any cause for alarm. However, my aim is for consumers to be able to access good quality advice, so if we need to do more in the interests of the consumer then we will do so.’’
Prime Minister Jacinda Ardern told media the Government was looking at what came out of the commission ‘‘because [of] the link between our banking institutions and theirs’’.