Nightmare end to pair’s B&B dream

WESTPAC has admitted it gave “poor advice” to a couple who went to the bank for retirement advice but ended up losing their family home.

And the bank, in another day of damning testimony at the financial services royal commission, has conceded it gave a $3000 bonus to the staff member who gave the advice.

The royal commission yesterday heard nurse Jacqueline McDowall and her husband, a truck driver, sold their home to buy a bed-and-breakfast business on the advice of financial planner Krish Mahadevan. They ended up with neither. Appearing before the commission yesterday, Westpac executive Michael Wright, the general manager of its BT Financial Advice unit, agreed the advice should never have been offered.

“This was poor advice,” he said. “It’s very clear this was not a viable strategy for the McDowalls.”

Confidential documents revealed the adviser brushed aside concerns flagged by Westpac staffers who review advice.

Mr Wright also revealed Mr Mahadevan still works at Westpac as an adviser.

The commission heard the McDowalls sold their home at Narre Warren, in Melbourne’s southeast, on Mr Mahadevan’s advice but were left in limbo when his promise of a $2 million loan came to nothing.

They had wanted to buy a country B&B to live in, and to help fund their retirement.

Mrs McDowall revealed they still had no house and had moved to the Northern Territory for better-paying jobs so they could save for one.

A tearful Mrs McDowall pleaded for consumers to be cautious. “I don’t know if we’re ever going to be able to get into our own home again,” she said.

Mrs McDowall said she will now retire when she is “in a wheelchair or Zimmer frame”.

Counsel assisting the com- mission Rowena Orr, QC, revealed the bank also sold the McDowells life, total permanent disability and incomeprotection insurance, securing $27,000 in commissions and $2471 in ongoing fees.