Australia's top bankers will have to explain what went wrong in their advice divisions at a public Senate hearing in Canberra on Tuesday.
Chaired by Labor Senator Sam Dastyari, the Senate Economics Committee will interrogate Macquarie Group chief executive Nicolas Moore and head of banking and financial services Greg Ward.
They will be followed by ANZ deputy chief executive officer Graham Hodges and chief executive officer of global wealth Joyce Phillips.
National Australia Bank (NAB) chief executive Andrew Thorburn and group executive of NAB Wealth Andrew Hagger will also face a Senate grilling, along with Commonwealth Bank (CBA) chief executive Ian Narev and wealth management group executive Annabel Spring.
Westpac and AMP are due to attend at a future date.
"It's time we shine some sunlight onto what has been happening in the provision of financial advice," Dastyari told Financial Standard, adding: "greater public accountability will result in better public policy outcomes."
He said that the Committee is intending to address directly with "the leaders of the financial advice industry" the numerous financial advice scandals that have been unveiled over the last few months.
Nationals Senator John Williams said he specifically wants to ask ANZ about the 8,500 clients of the bank's advice division who did not receive yearly revisions and that are being compensated with $30 million.
"I want to know what they are doing to raise the financial planning standards and how the compensation process is going," Williams said.
The Senator was the first to raise concerns in Parliament about cases of misconduct by CBA advisers and he tabled the motion for an inquiry into the performance of the Australian Securities and Investments Commission (ASIC) in mid-2013.
"We need to know if banks have any evidence of criminal activity, fraud or forgery in their advice divisions. ANZ's $30 million in compensation proves that there is a systemic problem with financial planning and that banks have obviously not been doing the right thing," he said.
Greens Senator Peter Whish-Wilson said that the hearing is "not just to name and shame" bank executives.
"It is a way of raising the profile of the issue. The hearing puts pressure on them because everything said there is on public record and is reported by the media," he said.
He revealed that he will ask executives about the specific changes that they have implemented to change the culture in their advice divisions: "It is very easy to get up on the stand and say that the culture is changing, but we won't know that if we don't know the detail."
Author: Laura Millan
Source: Financial Standard