The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Links to an external site.) was created to examine the misbehaviour of financial services entities and their agents. In its Final Report, the Commission wrote that:
[I]n almost every case, the conduct in issue was driven not only by the relevant entity’s pursuit of profit but also by individuals’ pursuit of gain, whether in the form of remuneration for the individual or profit for the individual’s business. Providing a service to customers was relegated to second place. Sales became all important. Those who dealt with customers became sellers. And the confusion of roles extended well beyond front line service staff. Advisers became sellers and sellers became advisers
This assignment is designed to help you develop your research, analytical, and professional writing skills. Good writing skills are one of the most important graduate attributes sought after by employers. You will need to become adept at finding relevant resources.
In this assignment you are to:
1.Discuss how the incentive structure in financial services firms can lead sales to become “all important”, with customers “relegated to second place”.
2.Examine what evidence there is that conflicts of interest created by incentive structures can influence financial advisers and lead to poor outcomes for customers.