Why Banking Scandals Will Continue
The financial-advice business is inherently flawed and possibly unfixable.
Moral hazard?
Photographer: Greg Wood/AFP
The best reality TV show in Australia right now is the televised hearings of the Royal Commission into Australian banks. The formal public inquiry, led by a retired judge with broad coercive powers, has uncovered a litany of wrongdoing including bribery and fraud rings, poor lending practices, and pervasive lying to regulators.
The most startling revelations relate to financial planning and wealth management. Banks have provided poor and inappropriate investment advice, charged fees without providing any additional services, siphoned fees from the estates of deceased clients, impersonated clients or forged their signatures on documents, and generally failed to act on legitimate client grievances.