How Has The Banking Commission Report Affected Market Shares?

2019 has already been a big year for financial reports: the Productivity Commission’s report on Superannuation was released on 10 January, and on 1 February, the final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was delivered.

The Commission report had plenty to say about banking executives and individual misconduct and greed fuelling the problems caused in the banking industry – including allegations of unethical and criminal behaviour. Several of the 76 key recommendations revolved around regulatory bodies, with demands for more stringent enforcement of existing laws and calls to address conflicts of interest which can occur when financial advisors are paid commissions for the products they recommend to clients.

The report notes that ‘culture, governance and remuneration are closely connected’ which means regulators have to step up in their supervisory roles. “Supervision must extend beyond financial risk to non-financial risk and that requires attention to culture, governance and remuneration.”

What Does That All Mean For Investors?

But what does that all mean for investors?

Better news than you’d at first think. In the wake of the report, banking stocks rose.

Mark Humphery-Jenner at SmartCompany suggests a few reasons why banks are surging rather than falling despite the reports’ criticisms: that the recommendations weren’t as strong as many feared they would be; that the government responded calmly; and that the report’s recommendations are going to be good for the industry.

In fact, the banks had already begun reforms ahead of the final report, which means that there was less shock when it was delivered. Current reforms to advisor fees and the prospect of improved governance are all good for the long term future of the sector, and should be a boost for shareholders.

Impact on Lending And Property Market

As for the impact on lending, the Urban Developer reported on 4 February that the report was unlikely to have an impact on the property market, as there were no recommendations to tighten lending practices. Along with things like advisor fees, banks have been addressing their lending practices since 2018. Lucia Stein of the ABC noted that it won’t really be harder to get a loan, but nor will it be cheaper.

If you would like to speak with a professional investment adviser about how the report might impact your investments or see how your portfolio is positioned for the year ahead, contact United Global Capital today on 03 8657 7640 or email [email protected] for a no cost, no obligation consultation.

Photo Credit: The Courier Mail

Recent stories

Age Pension and government benefits

When you retire, you may be eligible for government benefits such as the Age Pension or a concession card. The…

Read more

Super, death, and avoiding taxes

By Tony Kaye, Senior Personal Finance Writer, Vanguard Australia Having enough superannuation to enjoy a financially comfortable lifestyle in retirement…

Read more

Starting strong: Your 2021 Tech To Do list

In a year where simply keeping the doors open was a challenge for many businesses, finding the funds for tech…

Read more


An annuity, also known as a lifetime or fixed-term pension, gives you a guaranteed income for a number of years.…

Read more

Budgeting 102: Sticking to your budget

Budgeting for a holiday or saving for a deposit? Even the best budget can unravel if the right tools are…

Read more