The latest surprise at Kenneth Hayne’s Financial Services Royal Commission is the lack of regret and near-belligerence shown by Westpac over its share of ineptitude and failings – the now-usual story of junk insurance, commission-driven advice, fees for no service, poor or non-existent record keeping and so on.
Unlike the other banks, Westpac CEO Brian Hartzer seems to have Edith Piaf’s Non, je ne regrette rien as his theme song.
Asked about the motivation for selling a dubious Westpac car finance product, Mr Hartzer snapped, “I’m not a car salesman”, a reply Hodge QC described as “flippant” – and it went downhill from there.
Westpac is indeed treating the royal commission challenges differently. As other banks abandon the structural conflict of vertically integrated wealth management (owning the advisers, owning the platform, owning the products and clipping the tickets on everything as it passes through), Westpac is determined to stick with it.
And that lack of regret appears to extend to the election of directors at its December 12 annual general meeting. Up for re-election is Craig Dunn, with the unanimous support of the board.
Mr Dunn has a great deal of experience with vertically integrated wealth management – he ran AMP when AMP was doing all the things the royal commission has heard about.
When toothless watchpuppy ASIC first shadow-shopped AMP advisers early this century and found an overwhelming tendency to put AMP first, Craig Dunn was running the relevant division.
That didn’t worry the AMP board, which subsequently promoted him to CEO in 2008, a job he held for five years and during which AMP continued to put AMP first in its dealings with customers.
Further shadow shopping found very little changed, as has the royal commission. As CEO, copping the big bucks, one might assume Mr Dunn was across all the issues ASIC brought to the company and was happy with them.
What we’ve seen in the royal commission is the current executives and boards feeling the heat while those previously in charge have long since taken their bonuses and moved on.
On December 12, Westpac shareholders get to decide if they’ve been getting value for their money from the board and executive team and whether Mr Dunn’s rich experience in vertical integration is what they want in their bank.