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Financial services industry needs closer scrutiny

Financial services industry needs closer scrutiny

On the one year anniversary of the collapse of Lehman Brothers, Managing Director of JB Global, Justin Beeton, has broken ranks with his own industry to call for fundamental cultural change across the financial services and funds management industries.

“It would be a shame if the recent share market gains overshadow the ongoing need to reform the industry and its practices,” Mr Beeton said.

“In the wake of the global financial crisis there needs to be greater scrutiny of the industry, particularly when it comes to remuneration and commissions.

“Compulsory superannuation has meant the Australian pension market is the fourth largest in the world. The extent of recent fund losses demands industry self-examination and cultural change.

Mr Beeton said that the global financial crisis shone a spotlight on the culture of the funds management industry.

“Australians are more exposed to the fluctuations of the share market than most other nations. We should all be concerned about the need for greater transparency on commissions and performance bonuses,” Mr Beeton said.

“The difference between the global financial crisis and previous share market crashes has been impact on mum and dad investors. For this reason remuneration must be linked to not only wealth creation, but wealth protection.

“I’d like to see a return to basic principles, with the protection of client wealth as the first priority of fund managers.

“Most funds managers reward financial risk over the protection of client wealth, which suggests to me there is need for significant cultural change.

“The financial services industry can only improve its tarnished reputation through a commitment to cultural transformation and sustainable wealth creation,” Mr Beeton concluded.

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