Mr Stephen Sedgwick AO conducted an Independent Review of product sales commissions and product based payments in retail banking. This related to bank staff and third parties who receive payments for selling bank products such as deposit accounts, mortgages and credit cards.
The aim of the Review was to identify whether commissions, bonuses or other incentives might motivate bank staff to focus on their financial interest rather than their customers’.
The banking industry will use the independent findings to develop and adopt a new remuneration framework. This represents a voluntary extension of the Future of Financial Advice reforms to ensure remuneration in all bank businesses is aligned with customer expectations.
This Review was commissioned by the Australian Bankers’ Association as part of a 6 point reform plan announced in April 2016, to address conduct and culture issues in banks and was completed on 19 April 2017 with the release of a holistic final Report.
About the Review
The banking industry recognises that customers and the wider community expect banks to make sure they have the right culture, the right practices, and the right behaviours.
The aim of the Review was to identify whether commissions, bonuses or other incentives in retail banking might motivate bank staff to focus on their financial interest rather than their customers’.
Following a consultation process, and with the help of legal and remuneration experts, the Reviewer presented his findings, as part of the final Report, on how banks can ensure their remuneration and other arrangements align with good customer outcomes. It made 21 recommendations for change.