Westpac admits a senior financial planner gave poor advice to a couple that cost them their dream retirement.

Jacqueline McDowall and her husband ended up losing their home after trying to use superannuation funds to buy a bed and breakfast.

McDowall told her story to the banking royal commission on Thursday after being “led up the garden path”.

The couple’s plan was to put their combined $200,000 in superannuation into a self-managed super fund and use it to buy a property to live in and operate the B&B.

They were excited and confident they were getting professional advice after meeting with a senior Westpac financial planner in 2015, McDowall said.

That was even before a business banker told them: “You’re in the right place. I’m the moneyman. I’m the one who can lend you up to $2m.”

The McDowalls sold their Melbourne home, using the proceeds to clear the hefty mortgage and set up the SMSF.

They also took out the recommended new life, income protection and other insurance policies – costing almost $27,000 a year in premiums – and paid more than $5,000 upfront for advice that also attracted an ongoing $3,000 annual fee.

They then learned they could not borrow what they needed.

“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,” Jacqueline McDowall told the commission.

Michael Wright, an executive in Westpac’s wealth management division BT Finance said the advice was poor.

“It’s very clear this was not a viable strategy for the McDowalls,” he told the commission.

“I’m sure the McDowalls were passionate and excited about what their future could look like but the reality was it wasn’t viable. At that point in time, as professionals, we should have made it very clear this is not viable. It was poor advice.”

A Westpac staffer who investigated the McDowalls’ complaint noted: “There isn’t any lender in the market that would provide credit for this type of purchase.”

After a long process involving the Financial Ombudsman Service, Westpac paid the McDowalls $47,000 for the losses on the sale of their home and $60,000 for their superannuation.

They are now working in the Northern Territory trying to save enough to buy another home.