The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, has highlighted a number of key issues, including:
- Banks and other large financial institutions charging high fees on super and investment accounts, impacting on the performance of these for many Australians who trusted them with their money,
- Financial advisers who put their interests ahead of their clients’ best interests,
- Insurers who offered poor quality policies promoted directly to the public,
- Insurers who tried to avoid paying legitimate claims,
- Super funds doing their best to minimise insurance claims to get the most financial benefit out of their arrangement with the insurance company offering the insurance policies to their super members, and
- Ill or disabled super fund members not being paid claims on their super fund insurance policies.
The Royal Commission will release its preliminary recommendations this month and its final recommendations for the government to consider in February 2019.
We thought it was worth making comment on some of what has occurred and some of the shocking revelations:
- We are glad this Royal Commission proceeded and exposed the poor practices and misconduct by financial institutions, insurance companies, super funds and advisers, as well as the lack of disciplinary action by the regulators.
- Hopefully the outcome of the Royal Commission’s recommendations and actions taken by the government and the superannuation, investment and insurance industry will prevent issues like this occurring in the future and ensure such parties focus on the best interests of Australians who place their trust in them.
- Doctors Wealth welcomes changes to financial legislation to remove potential conflicts of interest in the financial industry. This includes ongoing financial advice regarding superannuation and investments (and any associated margin loans) on a fixed dollar fee-for-service basis only, rather than percentage-based fees.
- Doctors Wealth has only ever offered ongoing financial advice regarding superannuation and investments (and any associated margin loans) on a fixed dollar fee-for-service basis.
- There is an enormous difference between quality insurance cover obtained from a reputable insurance company via a financial adviser acting in your best interest, versus insurance policies obtained:
- Directly from an insurer or super fund,
- From a non-reputable insurance company, and/or
- A financial adviser not acting in your best interest.
- The most important thing to consider when obtaining insurance cover is whether you will be paid at claim time. You will quickly forget the cost of the premiums or how easy it was to obtain the cover, if you cannot claim on your insurance if something happens to you or your family.
Doctors Wealth’s focus has – and always will be – to be your trusted adviser with you and your family’s best interests our utmost concern.