Westpac has admitted to the House of Representatives standing committee on economics that staff within its controversial "general advice" campaigns had received revenue-linked bonuses.
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“Following July 2015, all revenue related components of the scorecard were removed from the scheme and were no longer applicable."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."
SUBSCRIBE TO THE IFA DAILY BULLETIN
23 Feb 2018IRESS results at ‘higher end’ of expected rangeBy Staff Reporter
23 Feb 2018Perth-based adviser cops five year banBy Staff Reporter
23 Feb 2018CBA contests new AUSTRAC claimsBy Staff Reporter
23 Feb 2018Global managers added to OneVue platformBy Staff Reporter
23 Feb 2018BT adds new insurers to APLBy Staff Reporter
23 Feb 2018Fintech a risk to specialist advisersBy Killian Plastow
- view all