Westpac has stopped charging its wealth management customers in its BT Financial Advice business for "grandfathered" trailing commissions in a move that will cut its half-year earnings by $14 million.
The bank said BT Financial Advice will stop receiving legacy commission payments from its financial products in light of 2013 laws banning conflicted remuneration.
The Future Of Financial Advice (FoFA) reforms introduced in 2013 banned future potentially conflicted payments to financial advisers but payments, such as commissions, already in place were grandfathered, or exempted from the new rules.
Westpac on Wednesday said the time had come to raise its standards for such arrangements.
"We have considered this position from both a customer and a stakeholder perspective and decided that it is the right time to draw a line under these past arrangements and eliminate them as far as we are contractually able," the bank said in a statement.
More than 140,000 customer accounts were still being charged under these legacy arrangements.
The lender said it would honour contractual obligations to external financial advisers still receiving grandfathered payments on BT products.
The move comes as Australia's financial industry faces intense pressure to reform as the banking royal commission focuses on misconduct and poor behaviour in areas including financial advice.
Share
