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Hockey's mother-in-law stung by rogue financial planners

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Patricia Babbage still gets emotional when she thinks about her horrific experience at the hands of a financial planner employed with the Commonwealth Bank.

The 77-year-old mother-in-law of shadow treasurer Joe Hockey says the planner Chris Baker put her life savings into high risk products and wiped out much of her wealth.

Patricia Babbage: she says much of her wealth was wiped out.

Patricia Babbage: she says much of her wealth was wiped out. Photo: Wolter Peeters

“I thought I had been placed into conservative investments but when I saw my money falling from $200,000 to $184,000 in a week and then kept falling, I would call him and he would say ‘it’s the GFC, don’t change anything, it will come back’,” she recalls.


By June 2009 her retirement savings had fallen to $92,000 and Mrs Babbage was in a panic. She said her husband Terry had died in 2004 and in 2005 she had been diagnosed with bowel cancer and underwent chemotherapy.

“I was sorting out my finances, and spoke to the Commonwealth Bank, and they suggested I speak to their financial planners. I was told to contact them at Martin Place and I then met Chris Baker,” she said.

Shadow Treasurer Joe Hockey delivered a post budget address to the National Press Club in Parliament House  in Canberra on Wednesday.

Shadow treasurer Joe Hockey. Photo: Andrew Meares

She said she was told that since she had turned 70, she needed to pull her money together and roll it over into products that Baker had suggested.

“I had put my life savings in with the bank since I was a kid at school with the little envelopes and so it was a trust factor letting them invest my money. What a mistake.”

In April 2012 Baker was banned for five years by the corporate regulator the Australian Securities & Investments Commission (ASIC) following an investigation into the advice of seven planners in the bank’s Commonwealth Financial Planning division.

Baker wasn’t the only planner who was banned. An investigation by Fairfax Media over the weekend revealed that six others including Don Nguyen were banned and the bank initially tried to cover up Nguyen’s misconduct. A group of whistleblowers tipped off ASIC in October 2008 and in March 2010 the regulator finally acted.

Soon after Nguyen was banned an investigation was conducted into other planners, including Baker. ASIC slapped an enforceable undertaking on the bank’s financial planning arm in October 2011, which expires in four months.

The investigation into Chris Baker found that between March 1, 2005 and February 27, 2007 he committed various breaches including failing to “determine the relevant personal circumstances and failing to make reasonable inquiries in relation to the personal circumstances of clients before implementing advice”.

The investigation found many of his clients were profiled with aggressive risk profiles and that he failed to provide a Statement of Advice to clients when he was required to do so.

On May 15, 2009 the bank wrote to Mrs Babbage telling her she had been given a new planner to replace Baker. “If your financial or lifestyle circumstances have changed since you last spoke to Chris, or you would like to review your financial strategy, please call me to make an appointment.”

In another letter she was told that ASIC had accepted an “enforceable undertaking from Chris Baker which precludes him providing financial services for a minimum period of five years.”

In August she was offered $43,286 in compensation, which included $8213 in interest, an offer that was valid for 60 days. She refused. Then in November, 2012 the bank increased the offer to $67,092, which included $5131 in interest.

Mrs Babbage took the offer. “It was too hard to keep fighting,” she said.

“I had been in hospital again and I needed the money,” she said. “There must be a lot of people inside CBA that knew what was going on. Don Nguyen was not the only person involved in these sorts of activities.”

Mrs Babbage said she didn’t follow up with a formal complaint because she had to deal with cancer and was overwhelmed with what was going on.

“But when I look at the miserable compensation I got and the huge profits the CBA makes each year I ask how can this be? I still get emotional when I think about what I had to go through,” she says.

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  • doyla66
    doyla66 Tuesday, 04 June 2013

    It happens to the best of lets see how Mr Hockey will pull the rabbit out of his hat?

  • doyla66
    doyla66 Tuesday, 04 June 2013

    At least he now has an inkling how we feel.....
    How about it Joe..put the pressure on for a Royal Commission.

  • doyla66
    doyla66 Tuesday, 04 June 2013

    "It was too hard to keep fighting" and "I needed the money" These are very telling statements and just what the CBA would be hoping for. Just wear you down until you have no fight left........Well, we have to keep fighting so this doesn't happen to any more of our elderly citizens.

  • doyla66
    doyla66 Tuesday, 04 June 2013

    This is his mother-in-law which makes me think back to the article in The Weekend Australian Magazine about 2 - 3 weeks ago. Joe Hockey's wife is the financial brains & according to that article she works for Deutsche Bank. So, not only Joe as the Australian shadow treasurer but also his wife, who works within that industry, should be doing all that they can to assist her to fight for what is rightfully hers.
    CBA only making an offer of such a pittance after they permitted their own employed rogue planners to swindle her out of her savings show who the real sharks are in the Australian banksters. If anything, CBA should have provided the return of her full savings with at least CPI adjusted interest on top as a measure of goodwill for their own shortcomings with their own employees. We all know CBA can afford that quite easily given their billion dollar annual profits! Way not good enough CBA - - the con bank fails again.

  • doyla66
    doyla66 Tuesday, 04 June 2013

    Wake up call to Joe: Clean up the whole FSP industry now!

    Poor woman! What a dreadful experience for her.
    Wouldn't you think the CBA would have made the effort to get it right for Joe Hockey's mum-in-law? Even as a PR exercise.
    That's how low CBA has stooped - they will even steal from the relations of politicians.
    I wouldn't spit on the CBA if they were on fire.
    CBA has an insurance company (CommInsure) and other forms of insurance. Surely that would cover compensation in the event of employee misconduct or professional error.
    I'm with you, Mrs Babbage.
    When they destroy our trust and then mess us around still further on the repayment of our own money in a timely manner and create further "aggravated damages" we never get over it.

  • doyla66
    doyla66 Tuesday, 04 June 2013

    Time to act Mr Hockey

    So Mr Hockey, how about you and your other party members taking a good hard look not just at the rouge financial planners and mortgage brokers as ASIC would have you believe but at he banking system in general? There IS systemic fraud going on we too are victims of it and it destroyed our lives. For goodness sake wake up and help us! BFCSA members vote you know. We need a Royal Commission to uncover the lies and cover ups that have plagued our banking system and regulators for years.

  • doyla66
    doyla66 Tuesday, 29 October 2013


    The banking and finance Corporations need to be controlled NOW - In light of what has been happening for years, the Government of the day needs to have the guts and the balls to act and make them pay
    Sorry but people first and shareholders second - before the cards fall down for all of us
    The finance industry is morally bankrupt !
    Stop talking Hockey - If you could not help your mother in law - how are you going to help other citizens that are being screwed?

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