The new head of Australia's corporate watchdog says the public is losing trust in people working in the finance industry, in a shift that will be "catastrophic" if it is not addressed.
Australian Securies and Investments Commission chairman James Shipton says trust in the infrastructure of the financial system is still high but that is now threatened by a growing lack of confidence in the system’s people.
Mr Shipton told an ASIC forum on Monday that the public needs to be confident that the people in banking, insurance and funds management will keep their promises.
“We also need to trust that directors, auditors, mortgage brokers, and financial planners will do their jobs with competence and honesty,” Mr Shipton said at the event in Sydney.
As the banking royal commission continues, Mr Shipton said trust seems to be high in the “bricks and mortar” that make up the financial system – such as the payment system and exchanges – but Australians did not trust people in the system sufficiently.
“The sustained degradation in trust in the people in finance will eventually start to degrade trust in the financial infrastructure itself,” Mr Shipton said.
“And this would be catastrophic.
He urged the industry to rebuild professionalism through competence, care and a focus on ethics to help rectify the situation.
Chief executive of Edelman Australia, Steven Spurr, told the forum a survey by the American marketing consultancy firm found 53 per cent of people don’t think financial market reforms are working.
He said regulation is now so overt and obvious in the sector that it is making people trust it even less.
“There has been too much discussion and conversation about regulation and about fixing trust and all those things, but what they want is a seamless experience where they do not have to worry about it,” he said.