Banking royal commission: Westpac advisers ripped me off, says nurse

Nurse Jacqueline McDowall paid tens of thousands to a Westpac planner for help on her retirement dream. His advice cost her dearly.

Nurse Jacqueline McDowall tells the royal commission that financial advisers “are not truthful”.

Nurse Jacqueline McDowall says she will have to work until she is 80 and in “a wheelchair or a Zimmer frame” after being comprehensively ripped off by a Westpac financial planner who is still at the bank.

Ms McDowall told the banking royal commission she had expected a professional adviser from a big bank such as Westpac to tell the truth, but “all of the sudden they pull the rug from under your feet after they have gained all that money from you”.

“They’re not truthful,” she said.

“It’s all just to gain money for their side.

“To do that to their customers is absolutely and totally disgusting.”

She warned people to be “very, very careful” when dealing with financial planners.

In tearful testimony to the financial services commission this morning, Ms McDowall told how Westpac financial adviser Krish Mahadevan tipped her and her truckie husband into a self-managed super fund and soaked them for tens of thousands in fees and insurance commissions after they went to the bank with a dream of buying a bed and breakfast as a retirement strategy.

In 2015, the couple approached the bank hoping to borrow enough to buy a $1 million bed and breakfast business, she said.

She said that at a meeting in August that year, Mr Mahadevan told her that the $200,000 the couple had in their industry super funds “was sufficient funds to go ahead with that plan”.

Westpac banker Karl Sleiman — who described himself in the meeting as the “money man” — said the couple could borrow up to $2m, she said.

Counsel assisting the commission, Rowena Orr

Documents tendered to the commission show Mr Mahadevan recommended they each take out $1m in life insurance, $150,000 in total and permanent disability cover and an income protection policy that would pay out up to $5000 a month.

They were also advised to set up a self-managed super fund.

In return, Westpac charged an upfront fee of $5280 for the advice, plus $3000 a year for ongoing advice and $27,000 a year for insurance premiums.

Westpac was to reap some $27,180 in upfront insurance commissions, plus another $2470 a year in ongoing commissions.

And Westpac might pay Mr Mahedevan a “planner share of revenue” of $16,690.

Counsel assisting the commission, Rowena Orr, QC, asked Ms McDowall: “Did Mr Mahedevan discuss that with you?”

“Never,” Ms McDowall replied.

“We felt with his professional advice he knew what he was talking about,” she said.

“We felt he was taking care of us.”

The couple went ahead with the plan, selling their house and moving into rental accommodation.

But at a subsequent meeting, Mr Sleiman told them they could not borrow against the property they planned to buy because they planned to live at the bed and breakfast as well as run it.

“I got a bit emotional, and I said, ‘This has been a complete waste of time’,” she said.

“I felt very upset and I just said to him, ‘what do we do now, where do we go from here?’”

She said she was upset because the couple “had sold our family home on your advice”.

“I just felt after that that we had been led up the garden path and lied to for Westpac to get their bit of the insurances,” she said.

“We were now in accommodation, which we were paying over the odds for because it was furnished and we didn’t feel we could commit to a 12-month lease because we thought we were going to be running a bed and breakfast.”

She said she did not tell her family about the situation because she felt “stupid”.

“I just told them we had changed our minds.”

Ms McDowall had expected going to a financial planner would be like going to another professional like a doctor or a lawyer.

“I never thought that I would be lied to,” she said.

“I thought what I was being told was the truth.”

She complained to the Financial Ombudsman Service, which she said was another ordeal.

In August last year, some 18 months after her complaint to FOS, it ruled in her favour, finding the advice caused her loss and ordering Westpac to pay the couple $47,000 for the loss on selling their house and an additional $61,600 into their super funds.

The $47,000 went “to pay off the debts we’d accumulated through all this process,” she said.

The $61,600 was paid into the SMSF, but Ms McDowall said she wanted it put back in industry super funds.

“They’re still taking their commission and we’re no further forward,” she told the commission.

“The new person (at Westpac) again is asking us to furnish the information we’ve already furnished three times and it’s very exhausting.”