ANZ head of superannuation Mark Pankhurst was confronted by questions regarding an enforceable undertaking it entered with ASIC earlier this year over the provision of general advice under it A to Z review program.
Counsel assisting Michael Hodge noted that the A to Z review program consisted of three steps’ “discussing a customer’s current financial position”, “discussing the customer’s future goals”, and finally an offer of retail banking products, thought this third step was separated by a “de-linking” statement intended to specify that it is not related to the information discussed in previous steps.
However, Mr Hodge contended that the program itself was “doing something with the aim of causing people to enter the product” the adviser suggested.
“Do you think it’s misleading to even call it advice?” Mr Hodge asked.
Mr Pankhurst told the commission that general advice is a “challenging issue” as it is intending to provide information to clients within a legal framework, stating the intention behind the program is to “make people aware” of what certain products can do for them.
“It must be a bit more than [that] though, isn’t it, it’s not just telling people about the product. ANZ wants people to take the product up?” Mr Hodge pressed.
“That’s correct, yes,” Mr Pankhurst said.
Mr Pankhurst’s remarks that general advice presents a challenge to providers reflects similar comments made to ifa by Smart Compliance principal Brett Walker in July.
Mr Walker told ifa that it is “extremely difficult” for banks to meet the legal requirements under the general advice regime as gathering data from clients on their existing holdings in financial products “is at the heart of the in-house distribution drive”.
“Banks will need to better script the processes and train staff about how not to fall into the personal advice trap,” he said.
The royal commission’s public hearings on superannuation continue today, with ifa sister title InvestorDaily covering the action live here.
The reality is it was personal advice, not general advice.
Each of the CBA and ANZ raised more than $3b in extra FUM, and hundreds of millions in management fees, while ASIC sat by watching since 2014.
Numerous serious breaches of the Corporations Act… but no meaningful penalties.
Dodgy products. Thousands of clients dudded.
Dover was shut down for something that had no adverse consequences for clients. But ASIC has different rules for banks. So don’t hold your breath.
General advice is nothing more then perhaps high quality customer service, in that you get to speak one on one with a SALES person who may have higher then the average knowledge of other staff members on the features and benefits of the particular product that the organisation is SELLING.Call it for what it is, SALES and get rid of the confusion for the public. The extra joke is when industry funds charge for this and then in some cases, also allow an on going fee to be charged.
Why hasn’t the advice community united as an industry to improve understanding of the value of advice and at same time take on industry funds ????
ASIC and ODwyer please stop both the Banks and Industry Super Funds getting away with this sales driven masquerad of “General Advice”. It is pure sale drive con jobs and needs to stop.
It should be called “Product Information” and a HUGE warning that it is NOT advice, they are NOT allowed to give advice and that you should seek proper advice before making a change.
I dont feel bad for the banks but why they arent throwing the industry funds under the bus saying they do the same thing is beyond me.
The least they could do is push for a level playing field.
And again the silence over unasked questions to the ISA over exactly this issue, is deafening.
What was that?
Yep apparently ISA can give General Advice with zero problems, different set of rules for them.
Let alone all the Fees for no service charged to every member and 90% plus dont use Intra Fund Advice but pay for it.
General advice , I know many who hide behind it all the time . Nobody knows what is is ? If I say maybe buy 100 BHP shares for your kids or some other shares , its a 45 page SOA etc for the Lawyers to chew over and a $2000 fee .Really ?? Solution – get rid of General Advice , Insurance on the TV ads and stuff like Collins House Robot advice on their Website . How did it come to this, again a lawyers picnic !!!!
So much of general advice is designed to sell something. General advice either over the phone or in person should be banned from the sales process. The sales reps giving general advice tailor that advice to individual clients and leave out certain details to obtain a sale. General advice should be restircted to after sale service. Clients can access general advice in printed material prior to the sale and the sale must be condicted by someone qualified and working in the cleint’s best interests.
General Advice is not advice. Period.Get rid of the term. Try Product Feature Explanation by an inadequately trained and inexperienced employee with a sales target.