Speaking on a panel at the Financial Services Council Summit in Sydney, Ashurst partner Lisa Simmons questioned whether the outcome of the Royal Commission is going to be as positive as some people think.
She noted the Government’s response to the Commission – plus additional proposed changes – represents “an ambitious reform agenda for the industry.”
“Selfishly,” she added, “I think about how much work it’s going to make for us and our clients. And I just wonder how, practically, we’re going to be able to get people around what they’ll require and need to implement in a short space of time.”
She continued by noting that ASIC’s enforcement has accelerated as a result of the Commission, and that “the idea that negotiated outcomes were an option has disappeared.”
“There’s a sense that any inquiry,” she said, “could lead to some enforcement action without the opportunity to potentially get an outcome that could result in a quicker – albeit more expensive – conclusion. We’ve had clients this week who received notifications on the grandfathered commissions review; that’s already underway.”
While Simmons conceded the extent of the misconduct uncovered during the Commission was “surprising,” she said there had “already been an expedition by industry participants and that those themes had been identified before the Royal Commission.”
Partly because of this, she believed the Commission “was like shooting fish in a barrel.”
“It very much felt like the evidence that was being taken in by the Royal Commission was the best case they had to demonstrate there was a particular misconduct issue,” she said. “Perhaps there was evidence available that the problem was being managed, or that the misconduct was as the result of a reason other than greed, but that was not necessarily addressed in the hearings.”
Ultimately, Simmons said she believes the industry was already in a “state of transition” prior to the Commission: “Actions like charging fees for not delivering services, deducting fees from member accounts and so on – these are bundles of activities the industry was moving to address. The Royal Commission simply accelerated this.
“And I don’t think making more rules and implementing more rules is going to restore trust.”
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