Royal commission report: how does it affect you?

The Banking Royal Commission report will punish offenders, but the ultimate responsibility to be financially secure is our own

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An entrepreneur I admire a lot is marketing expert Seth Godin.

In a recent post, Seth wrote about the honour code: Does introducing an honour code presume that the people involved have honour, or is it designed to create a space where honour can develop?

An honour code: The simple expectation that we trust you, that you call your own fouls, that you act honourably even if you think no one is watching…

As we think about implementing this, we need to decide between, “people are so dishonourable, it makes no sense to trust them” and, “the only way to help people become more honourable is to trust them.”

To trust people, to raise the bar, to insist on people finding their best selves. Because that’s the best way to make things better.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry recently released their findings which indicated their view that there is no honour in financial services. They have tabled 76 recommendations which will challenge key aspects of banking, superannuation and financial advice.

That the industry had failed to self-regulate and had to be dragged kicking and screaming to confront facts, was clear to all. The inquiry into the misconduct in the financial services also highlighted the exploitation of the vulnerable by those in position of power. Now, it is up to the authorities to implement the recommendations, while being mindful that there are a vast number of professionals who do create value for clients on a professional basis.

But how does this all affect you?

When the spotlight is on financial management, it is also an opportune time to analyse your approach to planning your own finances. It may be worth spending some time to initially educate yourself on the various financial issues which you come across on a regular basis – superannuation, how the tax system works, what is negative gearing, what are the different forms of investments, what are various costs involved in investing etc.

Talk to friends, talk to professionals, form an investment club and discuss Telstra shares over your tandoori chicken (or your samosas) – learn about it all so you are informed enough to take a rational decision. In today’s world of technology and access to information, it’s not really that hard, as long as there is an open mind.

More importantly, ensure that both partners are involved in this education so there is a person to bounce ideas off. Over time, even the younger generation can be involved in these family discussions.

As migrants to a new country, our journey is always going to be precarious as we establish ourselves professionally and personally. The demands on cash flow can be strong as assets need to be created and family responsibilities need to be met. Habits need to be formed to establish strategies enroute to creating wealth for your future.

While the Royal Commission report will spank those who are abusing their power, the ultimate responsibility is upon us ourselves, to ensure that we do not become vulnerable: rather we should aim to become financially literate.

With awareness comes power.

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Pawan is the publisher of Indian Link and is one of Indian Link's founders. He writes the Editorial section.