Westpac chief executive, Brian Hartzer has confirmed the company’s financial advisers are encouraged to sell BT Life Insurance products ahead of other offerings and he makes no apology for it.
Giving evidence before the House of Representatives Economics Committee review of the major banks, Hartzer confirmed that BT advisers “overwhelmingly sell BT life insurance, adding that it should be no surprise”.
“…that shouldn't be a surprise to someone who's coming to a BT life insurance rep—they have the ability to access non-BT product if that's appropriate,” the Westpac CEO said.
“The point is that we're very happy with the quality of the products that we put out in BT Insurance. They win awards all the time. They're designed for different life stages. We pay over 90 per cent of claims.”
Hartzer said he was aware that different people, particularly if they were independent brokers, had a different view, but our Westpac’s view was that insurance was a very appropriate product for it to be providing to customers.
“Our view is that, if we have a suite of products that suit different life stages and that are well structured and good value, that's what we can and should recommend,” the Westpac CEO said. “But, if one of those products is not suitable for a customer for different reasons, our advisers have the ability to access other products, and, in some cases, they do.”
Questioned by Greens member, Thistlethwaite about it taking up to four days from request for BT advisers to get permission to offer non-BT products, Hartzer said the company was not pretending to be an independent insurance broker.
Comments
At least he's honest, but he's wrong. Many of them do position themselves as being able to offer 'impartial' advice and many products. Its this implied positioning that is misleading.
A BT Life Rep .....they just don't get it do they......
a BT life insurance rep=Reprehensive!
Someone who represents a bank product!
Not a financial adviser then? Poor choice of words from the CEO ..financial advisers are duty bound to act in the clients best interests not flog product as a REP would.
It seems to me that this government has a lot to be grateful for to our Banking Industry that negotiated the global financial crisis with dignity and expertise and never, but never, had call on mandated "lender of last resort facilities" that sovereign government are obliged to provide when they issue banking licenses. Australia banks are admired throughout the world for their efficiency but most importantly their integrity and maybe we could wish that the same level of confidence could be placed on our leaders. But all I can observe is a smell of fear of losing office and power and off-shore trips by people like our Treasurer to get "tips" on how the Brits and others have dealt with some of their own banks' highly dishonest behaviour at, dare i say global level, rather than locals customer interface level that should best be left for resolution via the usual processes available at law..
Our politicians, supported by an unintelligent media, seem to be endeavouring to assist populist and some left wing elements to severely damage if not destroy a central institutional industry as they have endeavoured/ are endeavouring to do with other major instruments of our culture.
Hey David, are you aware of the unconscionable conduct of CBA; just say'n.
Mark - what are you trying to say?
Maybe I was having a German moment and took you literally and missed your sarcasm. It is sarcasm isn't it?
Take it as your intellect allows
Pleased re-read the last paragraph of my comments .....the issues you raise are already being examined by due process at law ....political commentary is inappropriate and unnecessary as is 'sensationalised" reporting in the media.
The evidence that the company was not pretending to be an independent insurance broker is extraordinary/ridiculous - in providing advice Westpac must act in the best interests of the client - every time it provides advice it is under an obligation to make reasonable inquires so as to identify products that are best suited to the client - its advisory arm can't simply act as a distribution point for its products and then say that's OK because we've told everyone what we are doing.
If the product addresses the client needs, why not? Do you review every possible product in the market before making a recommendation? If not, you're doing the same thing!
Ah, some honesty, how refreshing! In hindsight the insurance / investment rep title isn't all that bad! It would certainly make it clear to consumer what their role was, none of this "I'm a financial adviser and must act in your best interests" being sold to consumers when this is not the reality for 90% of industry practitioners (bank, industry fund and non bank alike!)
When in denial Lord Nelson would put his spyglass to his blind eye and say 'I see no signal'.
Why would a company such as BT want or even allow its salaried advisers to sell the products of its direct competitors.
If I had a company and got my competitors to pay my sales staff and do all my compliance work I would be a happy man. Wow our government and regulators are out of touch.
What Hartzer should have asked Thistlethwaite is
"do you promote the policies of your competitors in cases where your competitors policies are better suited to your client's situation, needs and goals?"
She would then lie. As politicians are trained to do.
You have that luxury when selling cars, phones or groceries. you don't have that luxury when you are required by law to be and scream from your industry soap box at every opportunity that you are in fact a fiduciary. Anyone with half a brain understood that slapping a fiduciary requirement on an industry completely designed and structured to support product sales was always going to be extremely difficult (if not impossible). And so the same old issues roll on, different disclosures, lower overall product fees but essentially the same industry environment as 1999.
Shine have now launched a class action over Westpac/BT saying clients were sold insurances that were more expensive by 4.5% than others. I think this will be interesting because price is clearly only one factor. There must be more to it.
ok what the Shine class action says is that you paid more for the same policy if you buy it through the Westpac aligned people then if you bought it via a independent. i.e. they were preying on the bank customers loyalty by charging them more!!
At least we know where the Queensland property spruikers all ended up?!
What has been intentionally omitted in the class action and the press coverage is that different underwriting standards also apply to the different pricing structure. Health loadings of up to 75% due to pre existing medical are waived that would normally apply if set up via an external adviser. Everyone in the risk pool pays a bit extra so that is possible.
So then all those clients at normally standard rates are disadvantaged.
perhaps a statement from westpac on either the statement of advice or the PDS carefully explains this special underwriting would have been inventive....but it was not there!
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