In a previous life I worked for a short time in a managerial role with a major bank.
I was horrified when I came across the apparently common practice for bank ‘Planners’ (and I use that term very loosely) to be allocated books of ‘orphan clients’. Orphans were customers that had been flogged a ‘product’ by a Planner who had moved on, most likely to another major institution.
These products often contained expensive fees including an allocation for ongoing advice. In some cases I witnessed Planners earning hundreds of thousands of dollars in salary and bonuses who were rarely meeting with any clients. It was clear that these clients didn’t understand what fees they were paying and what they were meant to be getting for those fees. Over many years this would add up to a substantial sum of money.
I am saddened by the revelations coming out of the Banking Royal Commission and bemused by the apologies coming from the banks but certainly not surprised.
By Terry Powell – Managing Director
