Westpac reforms adviser pay

Westpac will overhaul the payment structure for its 600-plus salaried financial planners from October 1. The bank will reduce up-front payments in favour of trailing commissions, aiming to encourage planners to keep customers rather than just signing them up for financial products. Under the new system a portion of a planner's bonus will be received at a later date as a trailing commission, dependent on measures such as customer satisfaction. Westpac's payments restructure also aims to reduce client “churning” by planners who may sell unsuitable products to customers just to gain the upfront bonus. Westpac said its planners don't receive soft-dollar commissions, heavily criticised recently by ASIC, but it hopes to lead the way on reform in the industry. The Financial Planners' Association has hit out at critics over the industry's failure to disclose soft-dollar commissions, saying it investigates and punishes all claims of corruption.