Westpac Banking Corporation [ASX:WBC] along with the other major banks of Australia are currently under investigation by the royal commission.
Things are not set to calm down as of yet, as Westpac are now facing misconduct issues within their business.
Their share value has dropped by 2.64% today, potentially related to the commission’s recent findings.
Westpac’s shares are now only valued at $28.41.
Misconduct taking a chunk out of Westpac’s finances
A former financial adviser of Westpac has cost the bank a total of $2.2 million across 91 clients.
The money was paid to these clients as compensation payments.
Westpac took months to report this act of misconduct to the commission.
Inability to manage conflicts of interests as well as breaching the banks code of conduct are the main factors in their upcoming investigations.
Andrew Smith was the one who gave out inappropriate advice, with the purpose of increasing his share of revenue while further increasing his monthly bonuses.
Westpac had other financial planners giving out poor advice to its customers.
Jacqueline McDowall and her husband lost their home and dream retirement after using superannuation funds to buy bed and breakfast.
Theguardian.com reported that McDowall stated to the commission:
‘I just felt that we had been led up the garden path and lied to, just for the Westpac bank to get their bit of the insurances, which were now being taken from our super funds.’
Westpac does openly admit the advice was poor on all scales, as the strategy was not viable by their standards.
Westpac had paid the McDowalls a total of $47,000 for their losses and $60,000 as superannuation compensation.
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