The Financial Services Union (FSU) is calling for the Future of Financial Advice (FoFA) reforms to cover the retail banking sector too.
At a recent Senate inquiry hearing into consumer protection in the banking, insurance and finance industry, FSU's national secretary Julia Angrisano said that there should be consistency in regulating problematic remuneration models that encourage selling of products 'at all costs'.
Angrisano said, 'Why should a customer seeking advice from their bank or insurer about a home loan, credit card, personal loan or general insurance product not have the same ethical underpinning?'
Angrisano used examples where sales was the only metric that management actively assessed workers on regularly, with changes announced at some Australian banks not actually put into practice yet, according to some employees.
A former personal banker and whistleblower at California's Wells Fargo, Kilian Colin, addressed the Senate, saying that there were 'unreasonable sales goals' focussing sales over service that contributed to his depression and attempted suicide. Colin had to sell between 10 and 20 products per day, and was instructed to open new accounts 'by all means necessary'. This led to him exposing the bank opening over two million fraudulent accounts without customers' consent over a 15-year period. Wells Fargo announced in March the settlement of the class action for over US$142 million.
While this isn't an Australian example, it is the exact same issue that affects staff in Australia, which over time contributes to poor mental health outcomes and medical problems as arbitrary sales targets increase.
Andrisano said there should be improvements in whistleblower protections in Australia.