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'Ban commissions immediately', says ISA

Industry Superannuation Australia (ISA) has asked banks to put their money where their mouth is and to abandon grandfathered commissions and ban all product incentives immediately.

In a statement released yesterday, ISA chief executive David Whiteley reiterated calls to get rid of product incentives and asked banks to stop "watering down" consumer protection legislation.

"The test now for the banks is to demonstrate with action, not words, that they are willing to do the right thing by giving up commissions, going further than FOFA requirements," he said.

"They should act immediately to abandon grandfathered commissions and other revenue-based incentives on all their products and services, including for executives," he said.

Mr Whiteley also levelled criticism against the Life Insurance Framework.

"Furthermore, legislation currently before the Parliament that continues to permit commissions on life insurance products should be amended to ban commissions outright if the banks are serious about protecting consumers," he said.

Yesterday, the Australian Bankers' Association (ABA) announced plans to implement news measures to protect consumer interests and increase transparency and accountability.

The ABA said it would move immediately to set up an independent review of product sales commissions and product-based payments with a view to removing or changing them "where they could lead to poor customer outcomes".

Comments (7)

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  • <p>Assuming he means the insurance commissions the Industry funds get also? Finally, he is being nice to his members. I&amp;#039m sure the members will get that commission rebate credited to their accounts, won&amp;#039t they? <br>ifa, can you ask him that please?</p>
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  • <p>Here&amp;#039s a question for David Whiteley.<br>Ask Ian Silk,the Chief Executive of Australian Super and a Director and Board member of Industry Super Australia, how he rates the current definition of Total and Permanent Disablement Insurance associated with the super fund he represents and then ask if he would be happy to have that definition attached to his own superannuation account or in fact the<br>2 million members of the fund he represents and whether he perceives the current definition potentially causing issues in relation to the acceptance of a claim ?<br>Then ask whether it is satisfactory that the members who had the previous definition of Total and Permanent Disablement attached to their account were all automatically transferred to the current definition and were forced to pay a significantly increased premium cost.<br>Then ask if it could possibly be perceived as a "watering down of consumer protection" ? <br>Once you have those answers David,then you can contact your advertising agency and consider the message on the Industry Super Australia website that states "..all fifteen Industry SuperFunds are run in the best interest of members........". <br>Finally, you may then wish to look up the definition of hypocrite and study it closely.</p>
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  • <p>Will Industry Funds ban the commissions (or other revenue) they make on automatically accepted insurance premiums, which is deducted from member accounts without their permission? Will they stop funding financial planning services via fees deducted from member accounts without giving the members the opportunity to opt-in or out of the service? Will they stop wasting members money on marketing, sporting sponsorships, political lobbying, research and press releases (such as this one), which have no benefit to their members, even though members are told that ALL profits are returned to them? Perhaps they could clean up their own backyard before commenting on the buisness model of their competitors.</p>
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  • <p>Why don&amp;#039t the ISA take the lead and stop getting paid income (commissions) from the insurers that provide their automatic cover. What a joke David Whitely is.</p>
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  • <p>Is ME Bank going to be first?</p>
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  • <p>well the ISA would say that wouldn&amp;#039t they, they have a guaranteed source of clients.<br>what they really mean is get rid of small business, and commoditize the industry.<br>thus effectively removing all competition. A bit like the arrogance of the Banks really, lets replace one Bully with another !!</p>
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  • Another Mad Planner Friday, 22 April 2016
    <p>While we are at it, can you also legislate to remove commissions form the rest of my everyday life?<br><br>ISA Funds (Various)<br>Car Sales and servicing<br>Mobile Phones<br>Mortgage Brokers (come on ongoing trail for what?)<br>Internet<br>Telephones<br>General Sales staff in any industry<br>General Insurance<br>Aged Care<br>Legal (No win no fee is just another commission)<br>and the list goes on...<br><br>These are just the ones I have come across in the last month or so in my working and personal life and I am sure there are many other commissions.<br><br>Mr ISA Chief Mouth piece get a real grip on reality and realise that your life is surrounded by commissions and it is a form of remuneration.<br><br>Just in case you have forgotten, the definition is:<br><br>"A commission payment is an amount paid to an employee based on how much they sell. Normally, the commission payment is calculated as a fee or percentage of the employee&amp;#039s total sales. A commission payment can be called a &amp;#039bonus&amp;#039 or &amp;#039incentive payment&amp;#039." (Ref Fairwork Australia Website)</p>
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