Banking reviews to change consumer understanding

Industry reports into the banking sector is a step forward in helping more Australians realise banks are like “drug companies,” Certainty Advice Group has said.

Last month, Stephen Sedgwick released the final report of his independent review into the product-based payments that banks offer their staff.

In a statement yesterday, Certainty Advice Group managing director Jim Stackpool said reports like these will allow more Australians to realise “the banks are more like drug companies providing product and not like hospitals or doctors providing services.”

“His report highlights that people’s behaviours will always align to how they are rewarded. If Mr Sedgwick’s recommendations are implemented, more Australians will realise how their banker or adviser is being remunerated. Then they will better understand if the advice or product offered is in their best interests.”

Mr Stackpool added, however, that the sales culture of banks, insurance companies and other financial institutions will not change due to reports like the Sedgwick review or a royal commission.

“What is changing is consumers’ understanding of a product-pushing sales culture versus a non-conflicted professional advice like they currently obtain from their doctor,” he said.

Meanwhile Scott Girdlestone, director of William Buck, Sydney, said he believes a conflict will always exist within banks.

“Whilst the banks have a right to provide advice, there will always be a natural conflict between shareholder demands (and therefore management's strategy) of the product manufacturer and advisers providing advice under the licence of the product manufacturer,” he said.

 

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