Last month, Labor MP Matt Thistlethwaite had placed questions on notice for Westpac in relation to two of its telephone campaigns in 2014 and 2015 that involved staff recommending customers move their other super funds into their Westpac-related super accounts.
He asked whether staff had been offered any incentives, while describing the campaigns as “pushing onto customers these products that might not be in their best interests”.
Westpac has now responded by saying employees were eligible for a “discretionary incentive scheme”, which had components related to the number of customers who rolled over, conversion rate and the amount of money rolled over.
“The discretionary incentive scheme was part of the employees’ balanced scorecard, which included both revenue and sales quality components. Staff were only eligible for an incentive payment if they achieved a strong performance across each component of their scorecard and had met their relevant compliance standards,” Westpac said.
“Following July 2015, all revenue related components of the scorecard were removed from the scheme and were no longer applicable.”
An ASIC spokesperson has also confirmed to ifa that these bonuses are part of the regulator’s court case against Westpac, as the “funds under management generated by the calls comprised a significant input into the calculation of the bonuses that staff members were paid”.
Late last year, ASIC announced it commenced proceedings in the Federal Court against Westpac subsidiaries for failing to comply with the best interests duty in these campaigns.
The regulator claims Westpac provided personal financial product advice to customers without undertaking proper comparison when recommending they consolidate super fund accounts.
Westpac strongly rejects this allegation, saying customers were given a general advice warning at the start of each conversation, and therefore comparison was not required.
During a hearing last month, Mr Thistlethwaite said while he has no issue with recommending clients consolidate their super, he is concerned that the switch may have left some clients in a worse situation.
He also raised concerns with the campaign process.
“The people involved in this unit conducted calls in accordance with a quality monitoring framework that sets out the structure of the calls to each customer. So the first process that they are meant to go through is called ‘gather’ where they ask the customers questions ‘to gather, uncover, clarify and develop an understanding of the customer’s needs, interests, motivations and requirements’,” he said.
“Second is ‘presenting’, where they present to the customer based on what the customer said in the gather section, including linking the customer’s motivations back to the products being offered in the campaign.
“And third is the ‘objection handling closing’, which is aimed at overcoming any objections raised by the customer to rolling over their superannuation into a BT account and where they use the end of the call to move the customer closer to a sale. It looks like one of those campaigns, which I thought Westpac was moving away from, whereby you are pushing onto customers these products that might not be in their best interests.”
Somebody tell me how this is different to Industry Funds calling members advising them to roll their other super funds into their one?
It’s no different. Union funds are just as dishonest and deceptive as commercial financial institutions, if not moreso. By all means let’s have a royal commission into financial institutions, as long as it includes union funds as well. It would be great to shine a light on the extent to which union funds are using members’ superannuation earnings to provide financial support and “hospitality” for union officials.
Exactly! I have always been all for a Royal Commission, provided it did not exclude Industry Super Funds. Labor wanting an RC into just the banks though is BS
Oh for goodness sake – I see absolutely no issue with people earning a bonus for doing their job effectively, efficiently and in a compliant manner – the ones that generally whinge are those that are ineffective, lazy and spend their time whinging. If anyone is acting inappropriately or is non compliant, the answer is simple – get them out of the industry – but please do not penalise staff from earning a bonus for doing a good job
The issue is that people from Westpac were recommending that customers roll their super into Westpac-related super funds and it sounds as though they did not tell the customers that they should seek independent financial advice before rolling their super over, and therefore aren’t “doing a good job.” The average person in the street doesn’t realise that they can lose hundreds of thousands of dollars in insurance benefits by rolling their super over, and only find that out when things go pear-shaped and they need to claim. It is frightening to think how many people just roll their super over without seeking advice given how easy it is to do via MyGov. The cost of seeking advice is a drop in the ocean when compared to the potential loss of insurance benefits.
Think you need to get a better understanding of the laws surrounding General Advice
maybe poliies shouldn’t get any benefits from winning office (ie car, office, travel, pension, expenses) this way they may only tell ‘truths’ and deliver on pre election ‘promises’ once they get in, sorry feeling the irony of being preached to !!!!!
This call centre “general advice” needs to be banned. A disgrace that this is allowed to continue.
Why? because they are asked to explore clients needs and assist them? Sounds like you were an ex employee that could not help clients
So Labor MP Matt Thistlethwaite asks questions of the Westpac Bank management as to the incentive scheme. Really. Where has this fool been. It was Labors own program that gave rise to vertical integration from 2007 onwards. Then when these banks ply their trade using every devious means possible, the folks that gave rise to it in the first place act surprised, astonished bewildered. Really our foolish ministers don’t realize that they really do not know what they are doing. And its everywhere that they have interfered and in every industry. Regulate the hell out of this industry and that to justify their existence as politicians. Leaving nothing but a disaster behind them taking the taxpayers money in the form of inflated salaries and pensions. To this the Australian public need to wake up and not allow such fools in office like this fellow Thistlethwaite . What a bloody shambles. And we IFA’s get kicked when its not us at fault. Damn fools in Cantberra..
100% agree Alistair. Thistletwat is just another ex-union official banging his drum so that his mates at the union still know he’s there doing a great job for the comrades, all the while being a booster for Union Super Funds. Why isnt Thistletwat hauling the trustees of Union Super Funds before his committee and grilling them over the changes to the insurance definitions that they have inflicted on members. I’m sure if Westpac/BT had done something similar he’d be all over them. Hypocrisy has a name and its Labor