The final report from the #bankingroyalcommission has been published. What are the consequences of unethical sales practices for the finance industry?
Transcript: Hi guys, it’s Ben Lai from Sales Ethos. Today I’m talking about the breaking news on the Banking Royal Commission. This has essentially been a call to arms for better and ethical sales practices by the financial industry.
In my previous video I was talking about one of the key reasons for ethical selling, which is that there is cause and effect. If you do the wrong thing, it’s going to bite you back in the bum at some point in time. Now is the time for the financial industry. As it turns out, the commission discovered that the big four banks had been engaging in a lot of shifty practices. They were doing things like charging exorbitant fees to the point of even charging people who were no longer living. The banks were lending money to people who simply could not afford the repayments. They were also pushing products on people that didn’t want it or need it.
This goes against everything that I represent, and I’m sure a lot of responsible financial industry people represent. Unfortunately, the consequences for all of this malpractice is outlined in the 74 recommendations in that report. So check the link below for the actual documentation.
Consequences of unethical sales: No “hawking” insurance or superannuation services
One of the key things is that they’re no longer allowed to “hawk” their services. This is especially for superannuation and the insurance providers and brokers. They’re not allowed to promote themselves anymore. So that’s going to be a really interesting question to address; how they’re going to find business if that’s the case.
Consequences of unethical sales: Remediation for affected customers
The other consequence is that there’s going to be huge remediation for those who have been affected. So, this is going to take the form of fines and possibly even jail time for those who have done the wrong thing. Which I think is a great thing to have consequences for those who are in the wrong.
Consequences of unethical sales: Removal of commissions for mortgage brokers
Finally, there’s also the prospect of losing commissions. This is especially going to affect the mortgage brokers. Their entire livelihoods depend on these commissions.
I’m going to withhold my personal thoughts on these three points for a later video. Speaking of which, this is a huge topic. So what I’ve covered so far is just the high level overview of what’s going on. It’s going to roll out over the next year or so. It has to pass legislation first before they actually implement the recommendations. In the next week or so, I’m going to produce a lot of content around this topic because I feel it’s really important and it’s something that we need to talk about and to put some recommendations forward.
If you like this video click like and subscribe. Leave a comment below – what are your thoughts about the Banking Royal Commission? Remember that integrity plus skills equals success.