Analysis of Ethics and Professionalism in the Financial Sector Report

This report delves into the critical aspects of ethics and professionalism within the financial sector, focusing on the implications of poor record-keeping practices. It examines the findings of the Hayne Royal Commission, particularly the issues of 'fees for no service' and the delayed submission of reviews by major banking institutions such as AMP, CBA, Westpac, ANZ, and Macquarie. The report highlights how inadequate record-keeping contributed to these issues, leading to regulatory scrutiny by ASIC. It discusses specific instances of unethical behavior, such as AMP's 'ringfencing' policy and CBA's charging of fees for services not rendered, including to deceased customers. The report also references relevant standards and regulations, including Standard 8 of the State Records Commission and the FASEA Code of Ethics, to emphasize the importance of accurate record-keeping and adherence to ethical guidelines within the financial sector. The report concludes by underscoring the need for improved record-keeping practices and compliance with ethical standards to restore trust and integrity in the financial industry.

Running head: ETHICS AND PROFESSIONALISM IN FINANCIAL SECTOR
ETHICS AND PROFESSIONALISM IN FINANCIAL SECTOR
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1ETHICS AND PROFESSIONALISM IN FINANCIAL SECTOR
The report forwarded by the Hayne Royal Commission discussed the chief issue that how
the poor standards in connection to record keeping made contributions towards the concerns
relating to ‘fees for no service’.
The ‘fees for no service’ is in relation to the four primary banking institutions, namely,
AMP, CBA, Westpac, ANZ and Macquarie. According to the ASIC, the major banking
institutions (i.e. the banks mentioned above), have irrationally delayed the submission of the
reviews regarding the failure of the ‘fees for no service’, which the banks were asked to conduct
by ASIC. As per the Commissioner of ASIC, Danielle Press, the delay caused by the
aforementioned institutions in the submission of their reviews, paved the way for the
Government to allow the ASIC certain directions, authorities and powers in order to increase the
speediness and swiftness of the remediation plans and programs in future days. The ASIC
Enforcement Review Taskforce Report of the year 2017 stated that one of the primary reasons
that led to such delay and postponement by the institutions is poor and pitiable record-keeping.
Due to such record-keeping, the major banking institutions of the nation of Australia have been
unsuccessful to assess the files in relation to the customers in an adequate manner. It may be said
that although the aforementioned allegations are in relation to five major banking institutions of
the nation, the Royal Commission has primarily focused on CBA and AMP. According to the
report of the ‘Australian Financial Review’, it may be said that a particular policy was followed
by AMP. This policy was known as ‘ringfencing’. As per this particular policy, the customers
were charged with fees without the delivery of any kind of service for a time period amounting
to ninety days, after any particular customer left AMP or any advisor affiliated to AMP. It had
been notified to AMP by the legal advisors of AMP that such charging of fees cannot be
considered to be legal. However, such notification had been ignored by AMP. It has been stated

2ETHICS AND PROFESSIONALISM IN FINANCIAL SECTOR
in the report of AFR that CBA had been charging fees from its customers for an approximate
time period amounting to almost a decade, without delivering any kind of services. Fees without
any services were charged by CBA even from customers who were deceased (Gilligan 2018).
Standard 8 of the ‘State Records Commission’ has been established in section 61 as
provided in the State Records Act of the year 2000. The primary purpose of this Standard is
provide a description in relation to the requirements that must be fulfilled regarding
Recordkeeping Plans for the organizations of the State in order to show and validate a good
practice in connection to digital recordkeeping. The main principles forwarded by this Standard
generally include management of digital records, retaining and disposing digital records, security
and safety concerning the digital records, storing and accessing the digital records, preservation
of the digital records and the authenticity of the digital records (Joseph, Keenan and Brogan
2018).
As per the FASEA ‘Code of Ethics’, it may be said that accurate record keeping exhibits
that the preparations and the guidance, which is provided to any client, meet the criteria
forwarded by the law.
To conclude it may be said that the rules and standards mentioned above should be
adhered to, in order to improve the record-keeping and any requirements related to such record-
keeping.

3ETHICS AND PROFESSIONALISM IN FINANCIAL SECTOR
References
FASEA Code of Ethics.
Gilligan, G., 2018. The Hayne royal commission and trust issues in the regulation of the
Australian financial sector. Law and Financial Markets Review, 12(4), pp.175-185.
Joseph, P., Keenan, M. and Brogan, M., 2018. Advocacy for the independence of the State
Records Office of Western Australia. Archives and Manuscripts, 46(2), pp.227-236.
State Records Act, 2000.