FSU slams CBA over commission conflicts
The Commonwealth Bank (CBA) yesterday testified to the Royal Commission that its home loan commission structure was riddled with conflicts of interest, in an admission that the Financial Services Union (FSU) said showed the bank’s lack of customer care.
CBA senior executive Daniel Huggins admitted to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that there were conflict of interest issues with its commission structure for home loans.
“The larger the loan, the larger the upfront commission. The longer the loan and the longer it takes to pay off, the larger the trailing commission and that is a conflict,” he told the inquiry.
The FSU said that it had known “well before” the Commission that “the banks were driven only by profit and that consumers were the losers.”
FSU national secretary, Julia Angrisano, said that customers would be “horrified” that brokers reaped financial benefit from locking them into larger loans for longer periods.
She said though, that the Commission offered a chance to ensure that such a scheme was not put into place again.
“The Royal Commission provides an opportunity to overhaul incentive schemes paid to bank employed mortgage lenders and the trailing commission model paid to third-party brokers,” Angrisano said.
“If we get this right we will go a long way towards rebuilding the trust and confidence of our community.”
AUTHOR
Hannah Wootton
Recommended for you
ASIC was active in the first quarter of 2025 with several financial adviser bannings and court action, while the FSCP also handed down outcomes to advisers.
With a joint venture announced between WT Financial and Merchant Wealth Partners, the firm may have a US background, but partner David Haintz has a long history with Australian financial advice.
The big four bank is set to see $40 million per annum in cost savings as it continues to migrate customers from its Asgard wealth platform to BT Panorama by FY26.
AMP North has added three new managers to its range of managed accounts for financial advisers and also extended its existing partnership with Betashares.
