Expert Advice with Ian Hosking Richards.

With all the recent revelations surrounding the unethical practices that are apparently shockingly common in the banking sector, who will ultimately bear the brunt of the fallout?

Charging fees to dead people for months and years?  Selling inappropriate financial products to clients with severe mental health issues? Classy.  And this is just the tip of the iceberg.  Kenneth Hayne’s report into the banking and financial services industry has made 24 referrals to ASIC and APRA to take action over misconduct.  But hang on, aren’t those the guys who should have been watching out in the first place?  It is a complete and utter mess.  Someone will have to pay for it.  The question is, who?

In theory, the answer is completely obvious.  The banks should pay.  They did the crime, so they should do the time.  And the regulators should also be accountable for their absolute failure to protect clients from such outrageous opportunism.

But let’s have a closer look at some of the key points of the report.  Interestingly, individual Bankers have not been named and shamed. And regulators stay as they are, but have been put on notice to ‘do better’.  That shouldn’t be hard….

So if the banks and the regulators are getting off so lightly, who is going to be the scapegoat?  Well from where I am sitting, it seems to be mortgage brokers   But hang on a minute, how does that work?  Banks rip off customers left, right and centre, and mortgage brokers cop the blame?  That hardly sounds fair.  How come?  Well apparently there is a conflict of interest because the broker is getting paid for introducing a client to a particular bank.  I have no particular problem with that.  If I go to a BMW dealership to buy a car, I suspect that the salesman is being renumerated in some way if I buy one.  I don’t expect him to try and talk me into going down the road and buying a Mercedes Benz just to make sure there is no conflict of interest.  It is all beyond daft.

Many of my investors have made huge equity in the past 5 years by following my recommendations, and are keen to continue with their investing.  But guess what?  They now find that they can borrow much less than they would have been able to just 12 or 18 months ago.   Why?  As a response to all the criticism, banks have decided to tighten up their lending policies.  The current knee-jerk reaction by banks and regulators to reduce borrowing is ridiculous.  They should be cleaning up their bad practices, not simply putting a handbrake on all lending, irrespective of the quality of the applicant.

Investors are constantly encountering distractions that can derail those who are not totally focussed on their long term financial goals.  If you would like to get started, or are keen to continue to grow an existing portfolio,  but feel that you would like some help to negotiate the current lending climate, please contact me.  I may be able to help.


Ian Hosking Richards is a successful property investor with a portfolio of over 30 properties. He is the CEO and founder of Rocket Property Group, a leading independent real estate agency that helps hundreds of people each year enter the property market or grow their existing portfolios. 

For further information or assistance, please visit or call 1300 850 038.

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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.