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.
