Yesterday, The Australian published allegations that the bank was overcharging 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 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 work for BT as an adviser in the Westpac branch network. I use other insurers roughly 80% of the time and BT usually only when they have medical issues that would normally result in a health loading of up to
75% but is waived due to the differential pricing and underwriting vs an ifa. Works well for my clients.
BT have been doing that for years – charging 10% more for direct. It’s nothing but a price gouge for clients who have been silly enough to go direct. It’s a terrible way of treating existing clients.
But its general advice! no need to act in the clients best interest ,no need to fully disclose extra premium for life insurance ,because these clients have a different profile! and they lapse more frequently according to Sue …Ahhh Trowbridge !!!
Michael ,its a shocking way to treat clients, it smacks of bulling ,charge them more then excuse it as a different service standard?Where are the ethics of this bank? On the question of ethical behaviour, if the intent is to ALLWAYS act in the best interests of the client, then this should be the minimum standard that ALL advisers be measured by, if that test fails so does the ethics and moral standing of the organisation and the people that work there.
BT general manager life Sue Houghton has said that a different customer service is the reason Westpac are charging (non disclosed) their own clients 10% more for life insurance than what BT are offering to advisers that are independent of the bank, how is this even a smart marketing move? Perhaps another read thru the FOFA rules and recommendations Sue.
The part about acting in the client’s best interest, fairness, full disclosure, transparency, honesty you know all of the attributes that an adviser that is independent of a bank brings to the table. Perhaps today’s announcement of a $1 million dollar fine by ASIC to a Melbourne advice firm may make this Big Bank understand “Acting in the clients best interest” hard to do with an APL that’s limited to one product Sue, your own BT life.
Direct Life Insurance is awesome for the Banks and Insurance companies, no adviser commissions to pay and as the customers have no advice they are far easier to rip off with higher premiums.
FSC, O’Dwyer, etc you are all disgraceful in allowing LIF to further facilitate such blatant rip offs of direct Life insurance at the detriment of the public.
LIF and O’Dwyer, it will come back to bite you real hard one day !!!!