A report recommending changes to sales-driven remuneration packages for bank staff says the new model should extend to financial advisers employed by the institutions.

Stephen Sedgwick’s review for the Australian Bankers’ Association (ABA) recommends bans on incentives for additional product sales or cross-selling.

The retired public servant’s report also calls for changes to banks’ workplace culture, aligning it with good customer outcomes.

The review of bank staff remuneration was limited to basic banking products, mortgages, general insurance and credit products. But he has called on the banks to extend his recommendations to staff selling wealth products, including life insurance.

His review finds most banks use high-risk pay practices.

“These high-risk elements include practices that deliver significantly increased incentive payments as certain sales or other financial thresholds are achieved. Also practices that provide incentives based on cross-sales such as add-on insurance products.”

The report acknowledges some sales-based volume payments have been banned under the Future of Financial Advice legislation, but it says a number of practices are not in consumers’ best interests.

ABA CEO Anna Bligh says the banking industry supports Mr Sedgwick’s recommendations and will implement them in full as quickly as possible.

“This represents a transformational change in the way banks go about their business,” she said. “It is a clear demonstration all banks are serious about making a better banking industry.

“The industry wants to ensure [staff] are rewarded for the right things and getting the best results for customers.”

Commonwealth CEO Ian Narev says his bank will implement “many of the recommendations by July 1 and will have all changes in place by the following financial year”.