Treasurer Josh Frydenberg announced that the Morrison Government has asked the House of Representatives Standing Committee on Economics to investigate the progress made by "relevant financial institutions" in implementing the recommendations made in the final Royal Commission report.
Importantly, Frydenberg noted that the Committee will now be investigating "other major relevant financial institutions and leading financial services associations," and that as per Hayne's report, "primary responsibility for misconduct in the financial sector lies with the institutions concerned and their boards and senior management."
"This inquiry will help provide further transparency to the public on the work financial institutions are undertaking to implement recommendations from the Royal Commission," Frydenberg continued, "and in doing so will contribute to restoring the community’s trust in the sector."
"The Government has asked the inquiry to commence as soon as possible," he said.
Frydenberg's announcement follows the introduction of legislation to "ban the grandfathering of conflicted remuneration paid to financial advisers."
Arguing that grandfathered conflicted remuneration can incentivise advisers to recommend clients financial products that aren't in their best interests, Frydenberg said it "can entrench clients in older products even when newer, better and more affordable products are available on the market."
"The Government's reform will benefit retail clients," the statement continued, "as they will receive higher quality advice and stop paying higher fees to fund grandfathered conflicted remuneration. Commissioner Hayne made it very clear in the Royal Commission Final Report that this grandfathering shouldn't continue."
The Treasury Laws Amendment (Ending Grandfathered Conflicted Remuneration) Bill 2019 will ban said remuneration by 1 January 2021.
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