According to documents lodged with the Supreme Court of Victoria, the bank has commenced proceedings against Martin Sherwood, Dale Morgan and James Williams, all of whom were previously licensed by Westpac Banking Corporation, according to ASIC data.
The former Westpac advisers are currently registered as advisers with Viridian Advisory, a boutique firm based in Melbourne with additional offices in NSW, Tasmania and Western Australia.
According to the Supreme Court documents, the proceedings against Mr Williams and Mr Sherwood have been brought by Westpac Financial Consultants, while the proceedings against Mr Morgan have been brought by Westpac Banking Corporation.
A spokesperson for Westpac subsidiary BT Financial Group confirmed the legal proceedings but was not able to provide further detail on the matter.
“Westpac has commenced legal action against three former employees for breach of contract. As the matter is before the courts, we will not be commenting further,” the spokesperson told ifa.
ifa has sought comment from the three former Westpac advisers.
Westpac is liar. Lies to to public, lies to regulator and is very calculative. It’s system is designed to rip people off and when someone finds it out a staff is made an escapegoat over and over again while the system continues on.
Great for recruitment at Westpac / BT. You would think twice before joining this organisation. They also review up to 20 files when you resign and do everything that they can to find ‘compliance issues’ and fail your exit audit in an attempt to tarnish your name in the industry and make future employment difficult.
This is absolutely true… they provide really very poor support to advisers to the work. But they have 100 people checking when you exit. Very poor model.
I dont work with Westpac/BT but to be fair if compliance issues are found and you can’t get another job it’s because you were giving poor advice to your customers. Getting real sick of the “woe is me” adviser attitude here. Pull your socks up all of you and look after your clients or get out and stop destroying our industry.
No – you don’t work with Westpac/BT, so I can’t see how you can comment. I did work for a Big4, and on leaving I have been made aware by former colleagues of some of the comments made and questions raised about my advice. I also watched it done off the back of departures of many of my colleagues before me.
Ultimately, they didn’t find anything which could tarnish my compliance record but it was clear from the conversations I had that they were trying hard to trump up the minor errors that everyone (I don’t care who you are) will have in their files from time to time.
Given the volume of work demanded of you as a bank planner, together with the complete lack of direct support staff in most instances, and ‘management’ that pays more attention to results than any other measure – there is room for errors and it isn’t necessarily all on the head of the planner. But sadly, as we’ve always seen with these organisations, they are the ones that carry the can – it’s always the planner’s fault – never the greedy corporate overlords.
I don’t know anything about Veridian or the 3 advisers mentioned in the article. But I am very surprised at the comments on this blog. I suspect the majority of comments are from those involved or connected to the case. If these guys did what some in this blog are suggesting, then I don’t think there will be any sympathy from the adviser community. Just because an institution (or individual for that matter) has poor morals or ethics does not mean they are fair game. That’s a pathetic attitude and there is no room for that in our profession.
Assuming you work for an aligned group Ben? Pathetic.
It seems like this is getting personal
But alas, we all have a view point based on our own bias
at the end of the day, sooner vertical integration goes the better.
Time for a cold beverage and let the egos have their say.
Westpac, you should be ashamed of yourselves. You should be cleaning up your act, working on your customer service, and actually doing your job. Terrible bank with terrible customer service now looking to go after the little guys…!? This was a surprising read. I wonder if they are just trying to distract the media from their much larger problems…
why are accused dodgy planners always playing the victim card of being the ‘little guy’?
Hi IFA, how has the business Viridian Advisory got so big without any coverage? It will be good to hear from the 3 advisers who Westpac are taking to court to get their view or Viridian itself.
ASIC needs to investigate all IFAs as well. They will find another raft of non ethical issues.
They should focus on cleaning up their own business model instead of litigating ex advisers for taking clients that clearly wanted nothing more to do with Westpac. Westpac have been in breach of the best interests duty for years with examples such as only 1 internal insurer on their APL and charging higher fees on their platforms for internal versus externally advised clients .
WOW, Westpac are charging the poor loyal customer more. Really one would have thought the media would have been all over it. But alas no. Lets focus on one random adviser selling too many annuities. PS Who is / was the biggest seller of Challenger annuities? Why would one bank have a trend that is not followed by all other planning firms, given they are all ethical.
I think the royal commission will be great, the bullies will be put back int heir box.
Will be interesting to see if IFA follow up on all the detailed comments.
I just wish WESTPAC would put as much energy into fixing ASGARD and advisernet – bloody useless. London to a brick its an argument of who owns the clients – funny to see how that plays out with best interest duty and annual review obligations
Hey Yachticus,
How about you put energy into finding your clients a better solution.
Asgard is overly expensive, poor functionality and no longer a good platform like it once was.
Oh, maybe they are pre opt in clients and you are also getting a cut of the admin fee and a rebate????
I know these advisers. They are ethical. They are excellent advisers. That’s why they stayed at Westpac, in some instances, for 20 years. They are men of integrity. I wish I could say the same for the managers at Westpac, who are now prosecuting this misguided agenda. Let’s be clear, the only people that genuinely care about the clients in question is the three advisers that are being sued.
At least some of these Managers, it seems, hold no FP qualifications OR have any advice experience whatsoever, and not on the FAR (so they risk nothing) yet they oversee Financial Planners at the bank. Amazing!
I guess we will see in the public arena who is ethical and if these advisers have done the right thing. For Westpac to take a stance it must be a serious breach. Get me the popcorn!
Yeah big companies only EVER sue small companies if there is a serious breach!?! LOL
LOL. The timing of this is amazing, as the banks are running with a community first attitude campaign. The facts in this will be interesting, but lets not forget the power imbalance in this. People commence a career and a told to sign a contract. At the age of 18 how many would understand what they are signing and what the implications are.
This could be a bullying tactic, or could simply be a tactic. Or it could be planners over stepping the line.
Viridian was started by advisers who were sold their clients by Westpac. It is all over their website. They now have significant ex westpac staff working for them. They have a referral agreement with Westpac private bank.
And maybe just maybe someone at westpac is angry. We will never know the truth.
But how many clients are told that the bank owns them, or the bank has a product penetration measure on them.
Ethical is an interesting perspective. There is a court case at the moment by Shine lawyers who aledge that Westpac charged higher insurance for internal clients. How ethical was that if true? Was this the only product this was done on? Why are people receiving refunds for home loan interest and credit cards? Was there other behaviour?
Good luck to the planners in question. As the clients should be able to be see however they like. When a bank allocates a client to a call centre planner does the client have a say, or are they simply a pawn in the game.
Mark sounds like you have some inside track knowledge. Can you find out how many clients have been stolen by the 3 advisers? I’m at a licensed practice and plan to do the same thing. I need to know what threshold to stick to before the licensee takes action on me so I can benefit as much as possible. My licensee isn’t the size of viridian with 60+ people.
you go girl
does your licencee ask you to self generate, and then claim ownership of the client. when will people understand the client owns the client. at the end of the day offer an employment offer that is too lucrative for employees to leave
seriously, people need to get a grip
poor management should not be covered up by lawyers
It’s may not be a serious breach, but it’s a serious business issue.
WBC generated these referrals form their network, WBC provided these guys with their training, and WBC provided these guys with tools of the trade “in some instances, for 20 years” .. Why on earth would you think they wouldn’t claim ownership of the income streams currently coming from these clients.
If I worked in your business, would you like me to steal your clients or would you expect me to negotiate a fair price t take them with me when I leave…
Get real… these guys were employees, WBC owes them nothing.
The clients also owe Westpac nothing – as a former client of mine said when I left the bank and told them I couldn’t take them with me due to a non-compete clause – “where are my rights in all of this – why can’t I choose whom I trust to provide my advice?”.
Of course, they don’t. It’s just that depending on the terms of the no-compete clause that [b]you[/b] signed, you cant encourage or pursue ‘your’ clients to make that choice.
If you get creative I’m sure you can think of a way to let your clients know you’re leaving and where you’re going without breaching the contract. Having the client on your new book isn’t the issue, its what you did to get them there that is the problem.
This whole issue seems to be another sign that we haven’t quite grasped the nuance of professionalism. Doctors, accountants and lawyers have been dealing with this for years. They are experts at flirting with this legal line and are willing to back themselves in court if it ever comes to it. As a group, we just seem to lack this delicacy and want to take a more direct, dare I say, naive, approach.
In the end, you cant [u]take[/u] clients.. but, then again, neither can the banks stop them if they make up their own mind to leave.
you mean their own back pockets..
Scare mongering to try and stop the large number of advisers leaving Westpac. “Don’t leave us, or we will come after you”
Its ok they will report all advisers through the ABA reference checking
so hahaha, no one will leave
abuse of power
ABA reporting should apply to managers
What needs to be mentioned is that Viridian was started by planners who were sold their clients by the same bank. This is widely reported. So the bank was happy to sell some clients, as these clients were commodities.
Maybe the truth in this story can be reported, and not the corporate lines being peddled.
Wonder how the founders of Viridian feel after doing the right thing and having these rogue advisers destroy their brand…
the founders doing the right thing??????
they are the same ones who run the licence and admitted these advisers into the group
ASIC would need to impose Ethical frame work in the Veridian Advisory.
The only way these restraints should be enforceable is if the planners were paid their salary in full during the restraint period. Bank ask people to self generate clients, and then the clients are owned by them.
It’s about time people are allowed to earn a living, and corporates are not throwing their weight around because they have large legal budgets.
typical banker wankers
well they are westpac bankers
Free my boys!
Meanwhile, how’re the clients doing?
Unless these planners printed a client list and contacted everyone before their non-compete clauses were served I can’t see Westpac having a leg to stand on. Westpac believes they own the client. I hope the Supreme Court asks each client that left Westpac to following their trusted adviser/planner to Veridian. Hmmmm dear client do you want to stay with Westpac and be allocated to new adviser after new adviser every 6 months as they restructure the business to ensure middle management receives a bonus (or pay the same fees to deal with someone in a call centre you’ve never met?), or stay with your preferred adviser/planner and receive wholistic face to face advice???? The only positive is that we may finally get a precedent set that advisers can leave their dealership without fear of this ever again.
Hi fellow Anonymous
You make a common mistake in not understanding this aspect of the law. Most modern restraint clauses do not rely solely on the non-solicitation provisions (-i.e. not contacting the clients for a set period in time). Most modern representative agreements have a provision restraining the adviser from providing services to specified clients for a set period of time – and yes this type of provision is enforceable, provided the time frame is not ‘excessive’ as determined by the relevant judge.
You are correct is saying that the client own the client, and the client can seek service from anyone. However, it is the adviser/representative that has signed an enforceable contract not to service particular persons for a set period of time. If the time limit (and geographical limit – e.g. 100 kms. from their previous office) is regarded by the courts as reasonable it is game, set and match to the former licensee.
Yeah but the adviser doesnt choose to sign said contract, they are told to sign or they their employment will be terminated, or if they dont sign and dont resign, that they will be deemed to have accepted terms of said contract (as was the case in our bank).
Westpac must have a strong case to take these previously advisers on in court. Wonder how the client feels when they google their adviser and they are being taken to court for breaching their employment restraints. Compliance?
The client has the right to move where ever they want to. If the client rings the adviser after he leaves , all is ok ….. lets wait to see the outcome. Only problem is the David and Goliath battle . No wonder there is an enquiry on bank behaviour .
As was detailed above, you are off the mark. The client can choose to go to the existing adviser, the existing adviser is restrained from dealing during the restraint period unless they pay their previous employer for the privilege. Either that or wait until your restraint period has passed. I have had this happen to me…. luckily never ended in court, but the threat was there.
“First they ignore you, then they laugh at you, then they fight you, then you win”.
love me some good Robbie Williams lyrics.
Westpac and ethics are generally not two words I’d use in the same sentence… they happily promote a dog-eat-dog environment within their ‘financial planning’ ranks, yet squeal when they get bitten.
Fair enough. I wish they were consistent though. When an adviser recently joined their ranks having shown bad ethics by downloading client lists etc of a previous employer it is all good. Westpac were even happy to ignore the ABA protocol to do so…