The regulator found that Martin Hodgetts, whose job included sourcing and submitting personal insurance business for Westpac in Victoria, submitted nine false policies between May and September in 2014.
The false policies contained invented details, including imaginary conversations and false signatures, and none were either requested or approved by any existing or new Westpac customer.
Mr Hodgetts’ also used the bank’s internal software system to dishonestly alter certain details of two of the false policies after they were submitted in order to avoid detection.
Victoria Police have laid charges in relation to Mr Hodgetts’ conduct.
ASIC’s action to permanently ban Mr Hodgetts from the financial services industry is part of ASIC’s Wealth Management Project which is targeting compliance in the four major banks, Macquarie and AMP, the regulator said in a statement.
ASIC deputy chairman Peter Kell said, “Mr Hodgetts’ misleading and deceptive conduct was driven purely by the commissions he collected which are completely contrary to the integrity required of a person in his position.”
In a statement, ASIC said the conduct of Mr Hodgetts, who worked for the bank between August 2010 and September 2014, was reported to the regulator.
Mr Hodgetts has repaid the commissions he received from the nine false policies.
Since ASIC’s Wealth Management Project started in October 2014, in addition to Mr Hodgetts, ASIC has also banned the following advisers from the financial services industry: Shawn Hickman, Brett O’Malley, Brian Farber and Rebecca Locksley.
Doesn’t make sense to me, why on earth would you jeopardize your career and personal reputation just to make $10 or $20 grand in commissions!?!
What’s more is that in the end he didn’t even gain anything financially because he had to pay back the commissions from his personal belongings!
The stupidity of some people is breathtaking..
@ Insider – I can only assume he structured policies monthly and maybe paid 1 month worth of premiums to get the commissions paid… Not sure what would happen with clawback… To my understanding the senior advisers get 40%+ of revenue over a certain amount per month so maybe he was trying to create some kind of ponzi inside Westpac… Who knows.
Also, I have a previous collegue that has moved across to NAB. He said that following all of the issues and bad press they have made a huge amount of improvements and he genuinely thinks the advice is of as greater quality as anywhere. From what I can tell they are leading in the bank space as you say.
There has been a lot of criminal activity including fraud in Westpac Banking Corporation Sydney office since February 2006.
It is disappointing that the then CEO of Westpac, Dr David Morgan did nothing to counteract this activity. For two years he sat on his hands and let his staff and contractors run riot over him and the organisation.
Ms Gail Kelly, CEO of Westpac Banking Corporation from 2008 to 2015 did nothing and may have participated in this criminal activity.
Kind regards,
Adrian Totolos.
Business Analyst.
Reality – exactly… Unless he wrote like $100k of policies, paid it himself then collected 110% comm (i.e. $10k gain), but that wouldn’t work because under their model an adviser who is well above target only gets around 20% of excess revenue anyway, so he’d only get $22k of the $11k comm and be way out of pocket…
No comm can be paid without the payment of a premium? Unless WBC pay on when a policy goes ‘in force’ which can be before premium debit occurs, so maybe they did that then he was detected when premium payment bounced?
In anycase, this is outright fraud and agree Melinda, great to see police involved.
The only ‘glass half full’ thing I would say is that at least this fraud did not result in any financial loss to a client, but one d/head like this for every 1,000 planners still brings us all under the same cloud of ‘sales’ and ‘dodgy’ and while I hate reading it, I’m glad these people are being weeded out and banned!
WBC model still has negligible ‘plan fees’ with percentage based entry fees (sorry, ‘implementation fees’) that make the plan fee look like pocket change. Their model of “no FUM targets” still is FUM focused because more $ in products = bigger fees.
Also, this fee model attaches no value to the advice. Massive focus on risk insurance too (love those commissions)…
I know NAB also has no FUM targets, with a flat dollar ADVICE FEE and flat dollar ongoing advice fee – both unrelated to product or FUM and at planners discretion and based on complexity and value of advice to client. NAB also DO NOT take up front comm on risk insurance.
WBC still old school.
NAB run like any other decent advice business and leading the way for banks as far as I can tell.
I cannot comment on CBA/ANZ as I don’t have the equivalent facts but would be interested if anyone does?
I am not wanting to turn this into a bank bashing exercise or a banks vs IFA exercise (please lets have some informative comments we can all learn from and remain positive, not just fall into a slanging match as comments on here often do), I’m simply making the note that like not all IFA firms are alike, nor can the banks be lumped together.
Some are actually walking their talk, but I’m curious is NAB is a lone wolf leading the way, or if WBC remains the only laggard.
Will ASIC ever go after senior management that oversaw him ? shouldn’t they too be charged by Victoria Police for aiding and abetting this Rogue?
Too true Matt S. Westpac Management will just lay the blame squarely on the ‘rogue’ adviser when it is their business model and sales at all cost culture that contributes to this type of behaviour.
How on earth did that work? Did he submit someone elses payment details? How could commission have been paid unless some of the premium was withdrawn.
Interestingly no comment from the Bank but guarantee the practice manager & hierarchy will have distanced themselves from this story even though it is their (the banks) sales target mantra that attributes to the unethical adviser.
Good to see the police being involved where there is fraud detected. This is essential and should be happening more often.
is this ever going to stop