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Australian Commission Finds ‘Unconscionable’ FinServ Practices

After increased pressure on the Australian government to crack down on misconduct in the banking industry, a Royal Commission released preliminary findings of its financial services probe, highlighting “unconscionable” conduct by the nation’s largest listed wealth manager, reports in Reuters said on Friday (April 27).

The wealth manager, AMP, was named alongside Australia’s largest lenders, including Commonwealth Bank of Australia, in remarks by Rowena Orr, a barrister assisting the probe, while announcing initial findings. AMP is now facing calls for its board to resign.

According to reports, the Royal Commission was told AMP misappropriated funds for a decade by charging clients without providing advisory services. Commonwealth Bank of Australia, reports added, is said to have charged some client accounts even after customers died.

Australia and New Zealand Banking Group was also named in the preliminary findings, with the probe discovering that the financial institution lacked sufficient controls to ensure advisors were complying with the law. Additionally, National Australia Bank advisors engaged in misconduct and illegal activity, including misappropriation of client funds, reports said.

Reuters said executives at the financial institutions in question “admitted to many of the instances of misconduct,” though they will also have an opportunity to issue official responses to the preliminary findings. They have a week to do so, as well as to provide input on whether the government should overhaul financial services regulations.

Earlier this month, the publication reported criticism against government regulators and their ability to address misconduct in the financial services space. Labor’s shadow finance minister Jim Chalmers told ABC reporters several days ago that the government’s delayed response to allegations of misconduct is representative of the government’s lack of understanding about the industry.

“They’ve learnt absolutely nothing from all of the scandalous revelations that we’ve heard over the last little while in the Royal Commission,” said Chalmers.

The Royal Commission was formed last November, initiated by the opposition Labor and Green parties.

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