Banking commissions needs to stop: ISA
Banks need to cease paying all commissions and incentives by 2020 as a way to restore confidence to the banking system, Industry Super Australia (ISA) believes.
ISA's chief executive, David Whiteley, urged a comprehensive ban on all incentives and commissions paid to all employees by all banks, including cashiers, business bankers, and financial advisers.
"In particular, banks should not be paying anyone a sales incentive to sell compulsory superannuation. The banks are simply not going to be able to re-build trust with the public and parliament through their own devices," he said.
"A decision by the banks to cease paying all incentives by 1 January, 2020, including all grandfathered commissions, is the circuit breaker needed to send a clear signal to the Australian community, parliament and regulators that the banks will stop cross-selling and up-selling superannuation and other products to consumers when it is not in their best interests."
Whiteley said the trust and confidence in compulsory super was compromised by the poor conduct of the banks.
"It is imperative that compulsory super was quarantined from the governance and conduct failures of the banks," he said.
Recommended for you
As the first quarter of 2024 comes to a close, Money Management looks back on the corporate regulator’s bans and AFSL cancellations in the financial advice sector.
Insignia Financial is holding ‘relatively steady’ onto its rank as Australia’s second-largest financial advice licensee after the Godfrey Pembroke exit but Count is hot on its heels.
Liberal senator Slade Brockman has said the government needs to have a “cold hard look” at the level of regulation in the financial advice space and the costs of running a business.
FAAA chief executive, Sarah Abood, has warned changes in the first tranche of the QAR legislation around advice fees documentation could create more work for advisers rather than less.