ANZ scraps financial planner bonuses amidst ongoing probe

Testimony by a company employee revealed that around 5% of the bonuses are “inappropriate".

Reuters reports that Australian lender ANZ has decided to quit paying bonuses to financial planners selling the company’s products in response to an ongoing inquiry on deep-rooted malpractice in the banking industry.

ANZ employees revealed at a landmark inquiry led by Australia’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that around 5% of the bank’s financial planning product sales were “inappropriate,” prompting the lender to reform its business practices.

The Royal Commission discovered a decade of corporate wrongdoing and unethical practices by Australia’s banks ranging from profiteering to extraction of fees from customers long dead.

The $5.3t (A$1.7t) mortgage market, dominated by the country’s largest lenders—Australia & New Zealand Banking Group Ltd., Commonwealth Bank of Australia, National Australia Bank Ltd., and Westpac Banking Corp. Aus—is also rampant with allegations of misconduct.

Also read: Scrutiny over Australian banks' wrongdoing spill over to New Zealand

Commonwealth, Westpac, and AMP were singled out as likely to have broken the law on multiple occasions, an inquiry revealed. The CEO of AMP has already quit after the firm admitted it misled regulators over charging customers for unreceived services.

“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.”

Here’s more from Reuters.