SYDNEY (Reuters) - Australia’s ANZ said it would quit paying bonuses to financial planners for selling its products, becoming the country’s first major lender to change business practices in response to a powerful inquiry that has unmasked widespread misconduct in the sector.
The move by Australia and New Zealand Banking Group Ltd (ANZ.AX) highlights how the Royal Commission has started to refashion an industry central to the world’s 12th largest economy, just three months into what is scheduled to be a year-long run.
“The world of financial services, particularly for individuals, will look very, very different in two years’ time,” said Michael McCarthy, chief strategist at CMC Markets.
“The Royal Commission is playing a key part in it.”
The barrage of banking headlines continued on Monday with Commonwealth Bank of Australia (CBA.AX) hit by a cut to its ratings outlook that cited potential ramifications from the Royal Commission and other inquiries as a key factor. The industry’s regulator also gave its first restricted license to an online bank which aims to take on the sector.
And in the past month, AMP Ltd (AMP.AX), Australia’s biggest wealth manager, has seen its CEO and chairman depart over allegations aired in the inquiry that it charged fees for financial advice without actually giving it.
The judge-led inquiry reports back to the government with recommendations in early 2019, but the industry’s biggest players are already scrambling to control the fallout.
ANZ’s decision to scrap sales bonuses for financial planners came after witnesses employed by the company told the inquiry 5 percent of the bank’s financial planning
