Commonwealth Bank scandal an opportunity to muck out the financial planning stables

''Systemic fraud'', ''systemic theft'', doctoring of customer files and ''lying to clients''. These were the words used by Senator Mark Bishop, the chairman of a powerful Senate inquiry into the Commonwealth Bank, as he struggled to describe the wrongdoings of one of the country's most trusted financial institutions.

The scandal inside the bank's financial planning division has become a lightning rod for what has gone on, and continues to go on, in some other financial institutions. It also laid bare the limitations of the corporate regulator in dealing with the big end of town.

The 61 recommendations from the Senate inquiry are an attempt to help the bank, the financial planning industry and the corporate regulator get back on track. It has a strong emphasis on consumers and more checks and balances on the job ASIC is doing.

Whether the Coalition has the resolve to proceed with a separate royal commission into CBA and launch a separate special investigation into other tainted financial institutions will be a test of how serious it is about cleaning up the financial planning industry.

With more than $1.8 trillion of retirement savings, the government needs to show that it wants to right the wrongs of the past. It should use the recommendations in this Senate inquiry as a call to arms to clean up the financial planning industry and re-engineer the corporate regulator so that it can do an effective job.

Australia has had its fair share of rogue financial planners, collapses and customers who have been like lambs to the slaughter when it comes to their money. The fall of Storm Financial and others resulted in several parliamentary inquiries.

Despite this, little has changed - but now is the time.

It is clear that the regulator needs to be tougher when it identifies wrongdoings and be quicker to act. In the CBA scandal, a whistleblower, Jeff Morris, warned ASIC in October 2008 about a rogue planner called Don Nguyen and a cover-up going on inside the bank. He warned customers stood to lose tens of millions of dollars. It took ASIC 16 months to launch an official investigation.

While ASIC sat on its hands, it gave some people inside the bank time to cover up what had occurred and dud the innocent victims of the compensation to which they were rightfully entitled.

The CBA financial planning scandal painted a clear picture of how an aggressive sales culture and managers who turned a blind eye to misconduct to protect their bonuses left many clients suffering far worse losses to their retirement savings than the losses brought by the global financial crisis.

To think this is the culture inside the biggest bank in the country is truly concerning. So is the bank's description of the situation as merely ''inappropriate''.

The brutal reality is there are still so many unresolved issues that need investigating, including the role of former and some present management, who oversaw a culture that treated customers as walking piggy banks.

ASIC no longer trusts the bank. Some of its customers no longer trust the bank.

Merilyn Swan, who fought the bank on behalf of her parents, said recently: ''It's the 'can' bank; I've found that they can be deceptive; they can be misleading; they can certainly ruin your financial future; they can cover up and they can go out of their way to make life extremely difficult for you.''

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