|Swanston Street Leica M4, Summicron-M 35mm, Fujifilm Velvia 50|
It wasn't really the fault of predatory lenders, the lack of regulation, dishonest financial advisers, or the ratings agencies, or monetary policy, or fiscal policy, it was the poor saps too hard-up to afford even a roof over their heads. Poor people should’ve known better.
Bear this in mind now a senate inquiry has found a conspiracy of deliberate "forgery and dishonest concealment" by the Commonwealth Financial Planning Limited, part of the Commonwealth Bank. It is thought CFPL misled up to 12,000 investors through compromised and corrupt financial advice, with some losing their homes and life savings.
The inquiry found some financial brokers and advisers "systematically targeted more vulnerable members of the community...without high levels of financial literacy”. With serious fraud and potential criminal activity at one of Australia's most "trusted" institutions, it’s clear there's something severely wrong with the financial sector.
The inquiry thought as much, recommending a royal commission be established in order uncover further instances of fraud and corruption in the financial advice sector. However, the Coalition (with close ties to the finance and business world) have played down any need for a one. A cynic might think there's no political mud to find by investigating one's friends.
The Australian is similarly resolute. Is fraud to blame? No. Is dodgy advice to blame? Nope. What about managerial cover-ups? Nah. According to the Oz's John Durrie, "the basic problem with the industry is investor apathy".
Wow. That's a BINGO! One could be forgiven for thinking systematic fraud, theft and conspiracy might have something to do with scandals in financial management. Nope, the blame sits with the investors for consulting accredited financial planners at one of Australia's largest financial institutions to look after their, you know, finances. What a stupid thing for people to do. That's like trusting your maid when she's cleaning 0ne's beachside villa. What, you don't have a maid? Oh. Well it's like trusting those people who clean your car not to touch the change in the centre console. You do have a car, don't you?
Speaking of cars, let's imagine another situation: you take your car to an accredited mechanic. The mechanic forgets to - I don't know - reconnect the brakes. You drive out of the shop and accidentally smash into first car you see. Who's to blame? You? Or the mechanic?
Now, imagine that mechanic received a commission not to reconnect your brakes, a commission you had no idea about and cannot possibly fathom. Perhaps that commission came from a tow truck company, or the panel beaters up the road. Who knows? You sure as hell don't. The Australian and the rest of neoliberal society want to tell you it's all your fault for trusting an accredited mechanic whose job is to, you know, fix cars. You should have been more interested in your car and less apathetic. After all, it is your safety!
It would be easy to say "serves you right" if the 12,000-odd victims were high-wealth, high-risk investors out for fast money. But they weren't. The majority were ordinary "mum and dad" investors who sought the safety of one of Australia's largest and most trustworthy institutions to slowly grow their earnings.
With the government too busy to establish a royal commission that isn’t partisan muckraking, we at least be certain the Financial System Inquiry will report with some great advice on the future of our advice and investment systems.
The FSI's chairman is one David Murray, former CEO of the Commonwealth Bank.
...we can surely expect a full and fearless report.