web analytics

Call for Royal Commission into Banking

Written By: - Date published: 8:00 am, May 23rd, 2018 - 13 comments
Categories: capitalism, class war, Deep stuff, loan sharks - Tags:

Bankers united
Sam Stubbs, a longstanding outspoken commentator in New Zealand’s financial industry, continues to advocate for a Royal Commission into banking and insurance.
This would be a great thing in my view.
The Reserve Bank governor has written to all our banks with a much narrower set of questions, and it’s all polite with no public hearings or accountability.
Here are the questions Sam Stubbs would like to see all of them ask:

Are the banks sales practices based on needs, or simply measured by the number of products each customer has?

Are sales staff of financial institutions incentivised to do the right thing, or to sell more products?

Are customers making fully-informed decisions before they transfer their banking or KiwiSaver to a bank?

Are sales staff being paid a commission to sell their own products while representing themselves as ‘advisers’?

Do commissions paid by fund managers and insurance companies prejudice the advice New Zealanders receive?

What is the sales culture and what pressure is applied to sales staff?

Do high customer penalties discourage good financial behaviours?

Are penalties applied to cover costs and discourage bad financial decision making, or simply to increase profit?

Like utility statements, should all financial fees be disclosed in dollars and cents each month/year and be shown how and where they are charged, for full transparency?

Are merchant fees at appropriate levels for the market?

Why do NZ companies pay higher merchant fees than Australia?

Insurance

Why are life insurance premiums remaining so high in a competitive environment?

Who is controlling what is paid, the product manufacturer/provider or the sales
agent?

How do we measure churning of policies to generate new commissions?

With so few NZ adults insured, how can the industry deliver such high profits and
shareholder returns?

NZ has not followed Australia’s lead to reduce commissions paid to life insurance sales agents. The high commission incentives have not led to more New Zealanders being insured. Does this mean they are driving the wrong behaviours?

Have non-cash incentives paid by life insurance providers e.g. overseas trips, incentivised appropriate sales behaviours?

Funeral, credit card and repayment insurance are criticised as expensive and delivering poor value to customers.

Do customers really understand what they are paying for, and the real cost relative to the benefit?

Are some customers being sold funeral insurance by companies that could sell them lower cost life insurance with better terms?

When is credit card repayment insurance in the best interests of customers? How profitable is it for banks?

KiwiSaver

KiwiSaver fees are high by global standards for long-term superannuation funds. They have averaged around 15 per cent of total return since inception. If the fee differential for an average KiwiSaver member is $65,000 between the lowest cost provider and the average cost provider at retirement, what value does that $65,000 provide?

Why haven’t KiwiSaver members benefited from economies of scale. The pool of savings is now $50 billion but there has been very little downward pressure on fees over the last 10 years.

Should NZ follow the UK and cap fund management fees?

Managed funds

When do performance fees add value to an investor?

What performance fees are being charged by fund managers when an investor is getting a return that is below similar products or the market?

How can performance fees be justified and valued in a fair and transparent way?

13 comments on “Call for Royal Commission into Banking”

  1. tc 1

    Overdue however it means nothing unless a govt has the bollocks to enforce change and police whatever emerges.

    Eyes on oz as their big 4 own ours and the reaming practices have a global basis with local tweaks.

    As for all the bs the rwnjs have about different markets, not being the same etc funny how it doesn’t seem to effect the seamlessness with which the senior managers go back and forth across the ditch.

    • cleangreen 1.1

      tc 100% ”I am with you there, – as the new Government needs urgently to grow big balls now, – as they are seen as being so scarred of upsetting the ‘rich and powerful’ aren’t they nowadays?

  2. adam 2

    I think if you think of yourself as left, is it not time you stopped using banks and buying insurance.

    Try a co-operative bank, it really not that hard a thing to do. And you will be helping other people.

    These institutions are at the core of oppression.

    • Rosemary McDonald 2.1

      Kiwibank was offering to takeover mortgages with other banks, waiving the transfer fee of a couple of hundred bucks. Partner and I inquired, and were rejected for the free transfer as our mortgage and income were too small.

      So we’re stuck. Trapped.

      • adam 2.1.1

        Kiwibank is not a co-op bank.

      • tc 2.1.2

        Try TSB and in further news on the limited choice front ASB are closing down their well liked, self service ‘Bank Direct’ model.

        A phone/web based bank whose clients didn’t have to deal with branches that do nothing except hold atm machines and appointments for the head office staff to come out and do the jobs they used to.

        A model most banks would prefer I.e. no branches, staff, technology not people driven process.

        An atm was broken a few weeks back at a BNZ, the staff inside were so happy to be serving customers again they couldn’t hide the excitement. I had an interesting chat with the tellers who were older hands that had rolled with the changes that see them doing SFA in today’s branch.

      • cleangreen 2.1.3

        Rosemary,

        Bless , as we also some years ago (under national) in 12012 were also rejected by Kiwi-bank for being a new client with Kiwi bank.

        This was even though-our long time TSB account was flawless, and we had a mortgage free property!!!!!

        So ‘Kiwi-bank is really a false profit’ simply.

        The new Government need to make Kiwi-bank change it’s character of being unfriendly to Kiwis such as us all.

        We are still happy with TSB and highly recommend this Kiwi owned Bank.

        • Gosman 2.1.3.1

          Do you want Government to interfere in the operational decisions of Kiwibank?

        • dukeofurl 2.1.3.2

          Doesnt make sense.
          Rejected as a new client – why dont you say they didnt give a new loan. Surely if you had security AND could afford the repayments you would qualify.
          I think you have missed saying something like either:
          a) too many existing commitments,
          b) you have been declined or have been hunting around for credit
          c) late payment much higher than the average customer.
          d) asked for too much for what you can afford
          e) other things you dont want to mention here

        • Ffloyd 2.1.3.3

          Re TBS. Good to have a glowing report. We have been mulling over whether we would change to them.

  3. Zorb6 3

    The redemption of Sam Stubbs,ex Hanover director, who may have seen the writing on the wall.
    No appetite for politicians to take on the banks in NZ.

  4. Are customers making fully-informed decisions before they transfer their banking or KiwiSaver to a bank?

    The irony of an ex-Hanover Finance CEO asking if “customers are fully informed before making a financial decision” is so huge you can actually see it from space.

Recent Comments

Recent Posts

  • Low-emissions options for heavy transport a step closer
    Getting low-emission trucks on the road is a step closer with investment in infrastructure to support hydrogen vehicles, the Energy and Resources Minister Megan Woods has announced. The Infrastructure Reference Group has provisionally approved $20 million for New Plymouth company Hiringa Energy to establish a nationwide network of hydrogen-fuelling stations. ...
    BeehiveBy beehive.govt.nz
    4 hours ago
  • New training centre to upskill workers
    A new trades training centre to upskill the local workforce will be built in the South Waikato town of Tokoroa through funding from the Government’s COVID-19 Response and Recovery Fund, Education Minister Chris Hipkins and Regional Economic Development Minister Shane Jones have announced. The Government will contribute $10.84 million from ...
    BeehiveBy beehive.govt.nz
    5 hours ago
  • Subsequent children legislation to change
    The Government has agreed to repeal part of the Oranga Tamariki Act subsequent children provisions, Minister for Children Tracey Martin announced today. “There are times when children need to go into care for their safety – the safety and care of children must always be paramount,” Minister Martin said. “But ...
    BeehiveBy beehive.govt.nz
    5 hours ago
  • Funding to expand mental health support for Pacific peoples
    A $1.5 million boost to grow primary mental health and addiction services for Pacific peoples in Auckland, Hamilton and Canterbury will lead to better outcomes for Pacific communities, Associate Health Minister Jenny Salesa says.  Pasifika Futures has received funding to expand services through The Fono, Aotearoa New Zealand’s largest by ...
    BeehiveBy beehive.govt.nz
    6 hours ago
  • Funding boost for sustainable food and fibre production
    Twenty-two projects to boost the sustainability and climate resilience of New Zealand’s food and fibres sector have been announced today by Agriculture Minister Damien O’Connor. The $18m funding will deliver practical knowledge to help farmers and growers use their land more sustainably, meet environmental targets, remain prosperous, and better understand ...
    BeehiveBy beehive.govt.nz
    8 hours ago
  • Mature Workers Toolkit launched on business.govt.nz
    Employment Minister Willie Jackson welcomes an initiative that assists employers to get mature workers into New Zealand small businesses. The disadvantages that older people face in the workplace was highlighted in the whole of Government Employment Strategy.  In order to address this, a Mature Workers Toolkit has been developed and ...
    BeehiveBy beehive.govt.nz
    8 hours ago
  • Trans-Tasman cooperation in a COVID-19 world
    New Zealand and Australia reaffirmed today the need for the closest possible collaboration as they tackle a global environment shaped by COVID-19, Foreign Affairs Minister Winston Peters said. “In these challenging times, our close collaboration with Australia is more vital than ever,” said Mr Peters. Mr Peters and his Australian ...
    BeehiveBy beehive.govt.nz
    9 hours ago
  • Pike recovery efforts now in unexplored territory
    The recovery and forensic examination of the loader driven by survivor Russell Smith means the underground team are now moving into an area of the Pike River Mine that has not been seen since the explosion, Minister Responsible for Pike River Re-entry Andrew Little said. “The fifth and last robot ...
    BeehiveBy beehive.govt.nz
    9 hours ago
  • Government confirms CovidCard trial to go ahead
    The Government has confirmed a community-wide trial of CovidCard technology as it explores options for COVID-19 contact tracing. “Effective contact tracing is a vital part of the COVID-19 response,” Minister of Health Chris Hipkins said. “While manual processes remain the critical component for contact tracing, we know digital solutions can ...
    BeehiveBy beehive.govt.nz
    9 hours ago
  • Enhanced process for iwi aquaculture assets
    The government is proposing changes to aquaculture legislation to improve the process for allocating and transferring aquaculture assets to iwi. Fisheries Minister Stuart Nash has introduced the Maori Commercial Aquaculture Claims Settlement Amendment Bill to Parliament. It proposes a limited new discretionary power for Te Ohu Kaimoana Trustee Limited (ToKM). ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • Bill introduced to fix National’s Family Court reform failures
    The Minister of Justice has today introduced the Family Court (Supporting Children in Court) Legislation Bill – the next step in the ongoing programme of work to fix the failed 2014 Family Court reforms led by then Justice Minister Judith Collins.  The Bill arises from the report of the Independent ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • DOC takes action to adapt to climate change
    A new Department of Conservation (DOC) action plan tackles the impacts of climate change on New Zealand’s biodiversity and DOC managed infrastructure including tracks, huts and cultural heritage. Minister of Conservation Eugenie Sage says extreme weather events around the country have really brought home our vulnerability to changing weather patterns. ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • Reduced international Antarctic season commences
    A heavily scaled back international Antarctic season will commence this week, Foreign Affairs Minister Winston Peters and Research, Science and Innovation Minister Megan Woods have confirmed. “Antarctica is the only continent that is COVID-19 free,” Mr Peters said. “Throughout the global pandemic, essential operations and long-term science have continued at ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • New high performance sports hub for Upper Hutt
    The Government is providing up to $30 million to help fund the NZ Campus of Innovation and Sport in Upper Hutt - an investment that will create 244 jobs. “The sports hub is designed to be a world-leading shared service for a range of sports, offering the level of facilities ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • Govt keeps projects on road to completion
    Transport Minister Phil Twyford announced today transport projects currently in construction will continue at pace due to extra Government support for transport projects to mitigate the impact of COVID-19. To keep the $16.9 billion 2018-21 National Land Transport Programme going the Government has allocated funding from the COVID Response and ...
    BeehiveBy beehive.govt.nz
    12 hours ago
  • First project utilising $50 million ‘shovel ready’ fund for rural broadband announced
    $50 million for further rural broadband digital connectivity has been allocated from the $3 billion infrastructure fund in the COVID Response and Recovery Fund has been announced by Shane Jones, Minister for Infrastructure and Kris Faafoi, Minister for Broadcasting, Communications and Digital Media. The investment will go to boosting broadband ...
    BeehiveBy beehive.govt.nz
    13 hours ago
  • Ultra-fast Broadband programme hits major milestone with more than one million connections
    The Minister for Broadcasting, Communications and Digital Media has congratulated the Ultra-fast Broadband (UFB) programme on its major milestone of connecting more than 1 million New Zealand households and businesses to UFB. “This milestone has been 10 years in the making and demonstrates the popularity of the UFB network. “Uptake ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • Vaping legislation passes
    Landmark legislation passed today puts New Zealand on track to saving thousands of lives and having a smokefree generation sooner rather than later, Associate Health Minister, Jenny Salesa says. The Smokefree Environments and Regulated Products (Vaping) Amendment Bill regulates vaping products and heated tobacco devices. “There has long been concern ...
    BeehiveBy beehive.govt.nz
    22 hours ago
  • Government repeals discriminatory law
    A discriminatory law that has been a symbol of frustration for many people needing and providing care and support, has been scrapped by the Government. “Part 4A of the New Zealand Public Health and Disability Amendment Bill (No 2) was introduced under urgency in 2013 by a National Government,” Associate ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • More competitive fuel market on the way
    Kiwi motorists are set to reap the benefits of a more competitive fuel market following the passing of the Fuel Industry Bill tonight, Energy and Resources Minister Megan Woods says.  “This Act is where the rubber meets the road in terms of our response to the recommendations made in the ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government delivers on rental reforms promise
    The Government has delivered on its promise to New Zealanders to modernise tenancy laws with the passing of the Residential Tenancies Amendment (RTA) Bill 2020 today, says Associate Minister of Housing (Public Housing), Kris Faafoi. “The Residential Tenancies Act 1986 was out-dated and the reforms in the RTA modernise our ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New rules in place to restore healthy rivers
    New rules to protect and restore New Zealand’s freshwater passed into law today. Environment Minister David Parker and Agriculture Minister Damien O’Connor welcomed the gazetting of the new national direction on freshwater management. “These regulations deliver on the Government’s commitment to stop further degradation, show material improvements within five years and ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Foreign Minister announces new Consul-General in Los Angeles
    Foreign Affairs Minister Winston Peters has announced the appointment of Jeremy Clarke-Watson as New Zealand’s new Consul-General in Los Angeles. “New Zealand and the United States share a close and dynamic partnership, based on a long history of shared values and democratic traditions,” Mr Peters said. “Mr Clarke-Watson is a ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Rental reforms provide greater support for victims of family violence
    Victims of family violence can end a tenancy with two days’ notice Landlords can terminate tenancies with 14 days’ notice if tenants assault them Timeframe brought forward for limiting rent increases to once every 12 months Extension of time Tenancy Tribunal can hear cases via phone/video conference Reform of New ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Apprenticeships support kicks off today
    Two employment schemes – one new and one expanded – going live today will help tens of thousands of people continue training on the job and support thousands more into work, the Government has announced. Apprenticeship Boost, a subsidy of up to $12,000 per annum for first year apprentices and ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Infrastructure to transform Omokoroa
    The Government is funding a significant infrastructure package at Omokoroa which will create 150 new jobs and help transform the Western Bay of Plenty peninsula, Urban Development Minister Phil Twyford announced today. Phil Twyford says the Government is investing $14 million towards the $28 million roading and water package. This ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Bill passes for managed isolation charges
    The Bill allowing the Government to recover some costs for managed isolation and quarantine passed its third reading today, with charges coming into force as soon as regulations are finalised. Putting regulations into force is the next step. “The COVID-19 Public Health Response Amendment Bill and its supporting regulations will ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Unemployment drop shows Govt plan to protect jobs and support businesses is working
    Today’s unemployment data shows the Government’s plan to protect jobs and cushion the blow for businesses and households against the economic impact of COVID-19 was the right decision, Finance Minister Grant Robertson says. Stats NZ said today that New Zealand’s unemployment rate in the June quarter – which includes the ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New role to champion reading for children
    A new role of New Zealand Reading Ambassador for children and young people is being established, Prime Minister and Minister for Arts, Culture and Heritage Jacinda Ardern and Minister for Internal Affairs and for Children, Tracey Martin announced today. The Reading Ambassador, announced at a Celebration of Reading event at ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Funding boost for Community Law Centres
    Community Law Centres will receive a funding boost to meet the increased need for free legal services due to COVID-19, Justice Minister Andrew Little said. The $3.5m funding is for the next three financial years and is additional to the almost $8 million for Community Law Centres announced in Budget ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New Zealand joins initiative to boost women’s role in global trade
    New Zealand has joined Canada and Chile in a new trade initiative aimed at increasing women’s participation in global trade. Trade and Export Growth Minister David Parker, together with Canada’s Minister for Small Business, Export Promotion and International Trade Mary Ng, Chile’s Minister of Foreign Affairs Andrés Allamand, and Chile’s Vice ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government provides $2.2m to heritage buildings for quake strengthening
    Building owners around New Zealand have benefited from the latest round of Heritage EQUIP funding with grants totalling $2,230,166. “The Heritage EQUIP grants for seismic strengthening assist private building owners to get the professional advice they need to go ahead with their projects or support them to carry out the ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Better hospital care for Northland babies and their whānau
    •    New paediatric facilities, including a Special Baby Care Unit •    Up to 50 extra inpatient beds  •    New lab facilities  Northland babies and their whānau will soon have access to improved hospital care when they need it with Health Minister Chris Hipkins today confirming new paediatric facilities and more ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Green light for Wellington and Wairarapa in $220m nationwide cycleways package
    People walking and cycling between Featherston and Greytown, or along Wellington’s Eastern Bays will soon have a safe shared path, as part of a $220 million shovel-ready cycleways package announced by Associate Transport Minister Julie Anne Genter. “During lockdown we saw many more families and kids out on their bikes, ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealand expresses condolences on passing of Vanuatu High Commissioner
    Foreign Affairs Minister Winston Peters today extended New Zealand’s condolences following the death of Vanuatu’s High Commissioner to New Zealand, Johnson Naviti, who passed away yesterday afternoon in Wellington. “Our thoughts are with the High Commissioner’s family and colleagues during this difficult time. This is a terrible loss both to ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government announces allocation of three waters funds for councils
    The Government has today set out the regional allocations of the $761 million Three Waters stimulus and reform funding for councils announced by Prime Minister Hon Jacinda Ardern this month.  "I want to thank Councils around the country for engaging with the Central Local Government Steering Group who have been ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Funding boost for students with highest learning support needs
    Students with high and complex learning needs, as well as their teachers and parents, will benefit from a substantial increase to Ongoing Resourcing Scheme (ORS) funding, Associate Education Minister Martin announced today. “Nearly $160 million will go towards helping these students by lifting their base support over the next four ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Govt connecting kiwis to affordable, healthy food
    Funding for innovative projects to connect Kiwis with affordable, safe and wholesome food, reduce food waste, and help our food producers recover from COVID-19 has been announced today by Agriculture Minister Damien O’Connor. “COVID-19 has seen an increasing number of families facing unprecedented financial pressure. Foodbanks and community food service ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Getting infrastructure for housing underway
    Eight shovel-ready projects within Kāinga Ora large-scale developments, and the Unitec residential development in Auckland have been given the go-ahead, Minister for Housing Dr Megan Woods announced today. Megan Woods says these significant infrastructure upgrades will ensure that the provision of homes in Auckland can continue apace. “The funding announced ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Napier walk and cycleway to improve safety
    The Government is funding a new separated walking and cycleway path along Napier’s Chambers and Ellison streets to provide safer access for local students and residents across Marine Parade and State Highway 51, Transport Minister Phil Twyford and Police Minister Stuart Nash announced today. Funding of $2.7 million has been ...
    BeehiveBy beehive.govt.nz
    3 days ago