The failure of bank operating protocols were a greater reason for fee for no service than the deliberate actions of financial advisers, according to Westpac chief executive, Brian Hartzer.
Giving evidence before the House of Representatives Standing Committee on Economics, Hartzer said that while there may have been some deliberate action on the part of advisers, “we would say that the majority of it is, effectively, a poor operating control around record keeping for the provision of advice”.
“There are some cases, of course, where we've had planners who perhaps have deliberately charged someone knowing they weren't going to provide the service. There have been others where there have been errors in people not following up,” he said. “But the majority of it - from what we can see so far - is to do with gaps in our record keeping.”
“So if I had my time over again, we'd take a very different approach to positively collecting, storing, demonstrating and confirming that customers were happy with the service that they had received, before we charged them,” Hartzer said.
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Are you serious? last I looked you have coders, you have staff, you have QA, you have testers, you have management, you have supervisors, you have Boards, you have internal auditors? you have external auditors? And you blame the system for thinking for itself and making an error. You need to get a serious reality check. We are not living the matrix as yet
Totally agree with you but you did forget that the bonuses spent on underwhelming senior executives in the bank was diverting funds away from useful things. Next thing he will be saying that the payroll system was underpaying staff.
Protecting thy arse I would say...
I worked at the bank (not as a planner) for some time and in the end left the bank because of the unethical attitude of management. The attitude to the FOFA reforms was more about how we could get around things, rather than how do we comply as complying would dent revenue. Something that didn't sit well with me, so I made tracks.
Management were very clearly aware that there were books of Orphaned clients who were not being serviced and they simply didn't care about them. When a planner left, clients got Orphaned unless another planner picked them up. There didn't seem to be any focus or KPIs around servicing existing clients or if there was, it wasn't the dominant end game. It was all about new business and how much insurance they could flog.
The bank is very adept at dodging criticism. They are as bad as the others, they just changed tact quickly while the others were getting pasted.
The Teflon Bank - nothing sticks....
The FPA have issued a press release cut and pasted agreeing with Mr Hartzer comments calling for greater education of planners about the importance of having "the right systems in place". A Masters Degree in IT should do it they've is the Gold Standard.... and compulsory membership of the FPA....The FPA stands ready in offering their approved IT Courses (Paid to get on the list) for their members. Oh wait that was CBA and their advice scandal during the last productivity review commission that recommended FASEA.
I fully support lifting education in the advice industry and I am just going out to enrol in my Masters in IT Systems now. Afterall it will compliment my Masters in Financial Planning. Looking forward to learning how to put a reminder in my Google Outlook Calender to remind me about opt in. Got to be ahead of the curve you know. Look it's not planners, it's not management.... it's the computer. Ha ha that's a classic. Could I suggest we implement a compulsory 3 hour IT exam as well? The FPA webinar on this starts at 11am next Wednesday, my FPA membership is really paying off well for me, thankfully they've only got $10 million sitting on term deposit (small gift from Westpac and the like) to run a couple of webinars on this topic.
@Serious - They also have more money to invest into systems than the rest.
If a little ole self license planner can do it why can't the banks? No excuse Mr Westpac.
Well I look forward to these comments being used by advisers all over Australia who the institutions will be attempting to get to cough up some $$ for fee for no service remediation. No sir, we have evidence the banks have stated it was systematic, not adviser error. Thank you for your honesty Mr Hartzer. You were the Licensee, and you failed in your oversight of authorised reps.
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