In late 2017, the Government announced a 12-month enquiry into the financial services industry called the Banking Royal Commission. But what is it and what does it mean for you?

So, you've probably heard about the Banking Royal Commission currently underway in Australia. But what is it and what does it mean for you? The Royal Commission (or let's call it the RC) is looking into misconduct in the banking, superannuation and insurance industries.

Why is it taking place? In two words: public trust. A decade of scandals has seen consumer confidence in the financial services industry substantially decline…. while the profits of the major banks have soared.

Frustration mounted as more cases came to light of misleading financial planning advice, breaches of anti-money laundering laws and work cultures alleged to reward aggressive sales tactics – just to name a few.

So, in late 2017, after a political squabble, the Government announced a 12-month enquiry into the financial services industry, expected to cost a whopping $75 million (and funded by taxpayers of course).

The RC is aiming to uncover the extent of misconduct that has occurred and to recommend solutions that will better protect the public.

Led by the former High Court judge Kenneth Hayne, the RC is geared around two big dates. An 'interim report', due by September 30, and a final report by February 2019.

What will the RC be keeping a close eye out for? Instances where the finance industry clearly didn't act in the best interest of consumers – think biased recommendations, fee grabs, excessive senior executive salaries, poor corporate governance, undercooked fine print… you get the picture.

While the RC will hone in on the Big 4 banks, they'll also be checking out smaller banks, mortgage brokers, wealth managers, insurance providers and superannuation funds..
The hope is this probe will strengthen the banking and finance sector to a level that will restore the confidence of consumers and the international community.

If you think that sounds like a lot to cover in a year, more than a few commentators would agree with you.

So, can we expect significant change as a result? You would have to think so. Aggrieved customers are being given a powerful voice to share their stories and the commission has been broadly empowered to explore and recommend change.

Over and above specific recommendations, we would expect a recommendation for legislating the "consumers' best interests" principle.

This will be one fascinating ride, and we'll be bringing you the big updates as they happen, so watch this space.

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