Westpac drops commissions for all customer facing staff, but what about the rest?

Westpac drops commissions for all customer facing staff, but what about the rest?

Westpac has changed the way it pays staff who interact with customers, whether it’s in a branch or over the phone, choosing to drop controversial commission payments in favour of paying them a fixed salary. 

The move -- intended to eliminate the conflict between sales targets and a customer’s best interests -- was recommended to the industry after a special government inquiry, and goes one step further than CBA, NAB and ANZ.

Why does it matter if branch staff were paid commissions?

The commissions paid to frontline workers have been in the spotlight for the last few years, culminating in a series of recommendations made in a final report commissioned by the Australian Banking Association, and handed down against the backdrop of 2017’s banking Royal Commission.

“...Some current (commission) practices carry an unacceptable risk of promoting behaviour that is inconsistent with the interests of customers and should be changed,” Stephen Sedgwick wrote, in his final review of Retail Banking Remuneration. 

“... Incentives have at least appeared to drive behaviour that was not in the best interests of customers and, on occasion, scandalously so.”

The 21 recommendations of his review were mostly adopted by the banking industry, but to various degrees.

‘We’re making an industry leading move’: Westpac

Westpac announced yesterday it has eliminated incentive payments for its customer-facing employees, and instead is replacing them with a permanent fixed pay increase. 

“Introducing a fixed pay increase and removing short term variable incentives for more than 4,000 branch and customer care roles will help give our customers confidence that the service they receive is wholly focused on their banking needs,” Richard Burton said, the acting chief executive of the bank’s consumer division. 

“...This decision will provide these employees with more certainty around their remuneration and recognise the individual service they provide to customers.”

Westpac eliminated sales commissions for branch tellers in 2016, and removed all other commissions for 2300 staff in 2019, replacing them with a $500 annual increase. 

The new agreement extends the changes to other staff who deal with customers, such as phone operators, by replacing other incentives with fixed pay increases, Mr Burton said.

The changes will affect Westpac’s subsidiaries as well, including St George, Bank of Melbourne,and BankSA, when the new remuneration agreement takes effect on October 1.

Do CBA, NAB and ANZ pay their staff commissions?

All big four banks pledged to follow the recommendations of the “Sedgwick report” following its publication in April 2017. Most typically do pay commissions, but they've reworked how they are calculated and are mostly not based on sales performance. 


Commonwealth Bank stopped paying its branch and contact centre staff commissions that are purely based on financial outcomes, the bank confirmed.

“We implemented the Sedgwick review recommendations in 2017 and de-linked sales to performance for our banking tellers in branch,” a spokeswoman told RateCity.  

“This means we primarily focus on the individual’s contribution to providing exceptional customer service, rewarding them for delivering better customer outcomes, not financial outcomes.”

Other CBA branch staff have their performance evaluated based on a 'customer service' metric.  

“We have a balanced scorecard approach to performance assessment,” the spokeswoman said. “This is largely related to managers assessing employees in relation to customer service and not sales.”


NAB’s branch and contact centre staff don’t have individual targets, but they do have collective targets, a spokeswoman confirmed, and some roles receive commission payments.

The majority -- 98 per cent -- of staff performance is linked to a “group” target. The spokeswoman did not account for the remainder.

The bank measures frontline staff performance using a scorecard, and no single criteria has a weighting greater than 33 per cent, the spokeswoman said, adding this bested the recommended guidelines.

“NAB is continually reviewing its approach to performance and reward frameworks to ensure they drive the right values and behaviours and deliver positive outcomes for customers,” she said. 


ANZ’s approach is similar to NAB’s in that it no longer sets individual sales targets for its in-store staff. Instead, it typically has team targets for branches, the bank confirmed.

But with store traffic on the decline due to the COVID-19 pandemic, the targets have been changed to cover regions.

These key performance metrics are not tied to any commissions, a spokesman told RateCity, adding they consider “all outcomes with equal weighting” during reviews. 

“ANZ moved to team based targets for generalist bankers in branch settings in 2018,” he said.

“As a result, financial performance is now assessed as a contribution to team outcomes rather than individual performance against sales goals.” 

The incentives don’t just apply to staff in a bank at ANZ. The spokesman confirmed they also apply to phone staff interacting with customers.

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How to use the ME Bank reverse mortgage calculator?

You can access the equity in your home to help you fund your needs during your senior years. A ME Bank reverse mortgage allows you to tap into the equity you’ve built up in your home while you continue living in your house. You can also use the funds to pay for your move to a retirement home and repay the loan when you sell the property.

Generally, if you’re 60 years old, you can borrow up to 15 per cent of the property value. If you are older than 75 years, the amount you can access increases to up to 30 per cent. You can use a reverse mortgage calculator to know how much you can borrow.

To take out a ME Bank reverse mortgage, you’ll need to provide information like your age, type of property – house or an apartment, postcode, and the estimated market value of the property. The loan to value ratio (LVR) is calculated based on your age and the property’s value.

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If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

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The interest is added to the loan amount and it is compounded. It means you’ll pay interest on the interest you accrue. Therefore, the longer you have the loan, the higher is the interest and the amount you’ll have to repay.

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Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

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The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

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Your bank statements and/or your internet banking should show these details. If you are not sure, call your bank or estimate.

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