The Australian recently published allegations that the bank was “charging double for policies” obtained via general advice rather than personal advice with a BT adviser or IFA.
“It can be revealed Westpac is charging its customers who are deemed to be receiving general advice – as opposed to personal advice from its financial planners – 10 per cent more for identical policies it sells externally under its BT brand,” the News Corp report alleges.
In a statement to Risk Adviser sister site ifa, BT general manager, insurance, Sue Houghton said “simplistic headline comparisons” of products sold through various distribution channels are “confusing for consumers”.
“Different channels have different customer service and underwriting and cater to different customer needs,” Ms Houghton said.
“Customers who purchase after having received general advice do not pay any fees to access the general advice and obtain basic help and assistance.
“Around 2 per cent of our in force premiums come from general advice customers.”
Ms Houghton said that customers and clients in the various distribution channels will likely have “different profile[s]” and lapse rates, which would also affect premium rates.
The comments come as Westpac is locked in a dispute with the corporate regulator before the Federal Court relating to the definition of general advice.
In March, Westpac boss Brian Hartzer told a parliamentary committee hearing that the ASIC case will have significant implications for the financial advice industry.
“If the ASIC case was to be successful, it would become effectively close to impossible to deliver general advice as intended by the FOFA regime,” Mr Hartzer said.
I’m relieved to hear only 2% of the Westpac [BT brand] customer base is general advice. Just like the Romans the Banks came, saw, conquered and eventually crumbled in the reality that they only ever envisaged life insurance as another layer of money to add to their ever burgeoning bottom lines – they never considered the consumer and their real needs. And akin to the movie title – ‘a few good men [and women]’ we survive as specialist risk advisers – there to try and help repair some of the enormous damage left in the wake of the rapidly vacating banks from our life insurance industry. May they never return!