Treasurer Joe Hockey says the financial planning problems at the Commonwealth Bank are not systemic in the industry. Photo: Glenn Hunt
Treasurer Joe Hockey has signalled he may not be not in favour of a royal commission into Commonwealth Bank over financial planning misconduct.
"This is one institution. I don't think it is systemic," Mr Hockey said on Thursday.
"It is best to ensure that integrity issues are ultimately going to be in the hands of shareholders and customers of Commonwealth Bank and people who have been affected by their previous financial advice,” he said
“[But] I'm not qualified to comment on that," he told the Australian/Melbourne Institute conference.
Mr Hockey had previously distanced himself from the issue as his mother in law, Patricia Babbage, had been the victim of a Commonwealth Bank financial planner subsequently banned over misconduct.
After a drawn-out battle Ms Babbage was eventually awarded more than $67,000 in compensation after one of the bank's financial planners put her into products which were inappropriate for her personal
circumstances and she lost money. Her savings fell in value to $92,000 from $200,000.
"Clearly the Commonwealth Bank was just too slow to get to this point," Mr Hockey said.
"A lot of the anxiety could have been averted if they had moved more quickly."
Mr Hockey said he recognised the bank had apologised but again said it took too long for CBA to act.
"Firstly you have to recognise the problem exists and for a long period there was denial," he said.
"The second thing is you've got to show appropriate contrition for what happened. Now they've done that. The third thing is you've got to have a plan to ensure people are given appropriate compensation. They are starting to do that, but there's obviously a long way to go."
Mr Hockey would not comment on whether CBA's decision to allow all its financial planning advice over the past decade to be opened up to review, would result in massive compensation claims from others.
But he said he did not think the problems at CBA were widespread.
His comments came after CBA chief executive Ian Narev said on Thursday that CBA victims would be able to apply for compensation from a multi-million dollar fund.
Mr Narev had been under intense pressure to respond to a scathing senate inquiry report released last week.
The report called for a royal commission into fraud, forgery and a management cover-up in the financial planning division of the bank.
Under the revised scheme announced by Mr Narev on Thursday, anyone who signed up with a Commonwealth Bank financial planner between 2003 and 2012 will be able to apply for compensation, with claims are to be assessed by a ‘‘specialist Commonwealth Bank team’’.
But lawyers representing some victims of the financial planning scandal have described the proposed compensation measures as inadequate, saying they lack independent oversight.