Macquarie Group Ltd. will stop paying commissions to its financial advisers for selling the group's own wealth products to customers, joining Westpac Banking Corp. and other local financial institutions in abandoning the practice, The Sydney Morning Herald reported July 3.
The change, which will start from April 1, 2019, will benefit 17,000 customers of Macquarie's private wealth and private bank, the company said in a statement. The move will offer customers a more transparent product and service, Macquarie said.
Australian laws allow banks to reward financial advisers with commissions if they recommend their own investment and insurance products and if the clients hired the adviser before that date. However, the practice has come under scrutiny as the country's royal commission into the financial sector revealed that banks relied on the provision to charge ongoing fees to clients for services they have not received.