ASIC announced today that it has commenced civil penalty proceedings against Westpac Securities Administration Limited and BT Funds Management Limited.
The proceedings follow an ASIC investigation into Westpac’s telephone sales campaigns, which target superannuation fund members.
ASIC alleges that during two telephone campaigns, WSAL and BTFM provided personal financial product advice to customers, specifically recommending they move their other super funds into their Westpac related super accounts.
WSAL and BTFM are not permitted to provide personal financial product advice under their AFSLs, ASIC said, and they allegedly did not undertake proper comparison of the superannuation funds as required by law.
Further, ASIC alleges that WSAL and BTFM “failed to do all things necessary to ensure that the financial services covered by their licences are provided efficiently, honestly and fairly”.
They also “failed to comply with the conditions of their licences which only permits those licensees to provide general advice and failed to comply with the financial services laws in the Corporations Act”, ASIC said.
ASIC and Westpac will continue to co-operate to limit the facts in dispute in the proceedings, ASIC said.
The first hearing for the proceedings will be on 2 February 2017 at 9.30am in the Federal Court in Sydney.
I think ASIC needs to step up here, the bank branches have been doing this for years and could not give a brass razoo about providing ‘best interests’ just meeting their KPIs. This issue is on a plate for ASIC to deal with properly and show their capabilities, the arrogance of Westpac is astonishing; either that or ASIC needs to review their requirements being imposed on independents and others operating fairly and move to “let the buyer beware”. I think this should be resolved quickly for the sake of the industry, the continued image damage means less and less new long term clients.
Patrick is right vertical integration fosters an inherit conflict of interest. Actually, I think we need to go one step further, removal of dealer groups so that the financial adviser is truly non-aligned with anyone except the client.
I agree that vertical integration is a bad thing, but I’m not sure that is what happened here. It sounds like a financial institution using marketing to provide personal advice, rather than using professional advisers. Exactly the same as what the union funds have been doing for years and getting away with. Let’s hope ASIC finally cracks down on the union funds as well.
yes, got nothing to do with vertical integration. This was a call centre using a poorly worded script to encourage consolidation. Nothing to do with a vertically integrated advice channel giving advice…. unless you count the call centre / trustee (who is licensed to provide general advice by nature of the fact it is a financial product provider…) see RG244
LJ – so as long as the wording is “right” a product provider can call customers of the bank and non clients and spruik their wares. no need for best interests, no SoA just “read the PDS” type boiler plate get out clauses. hey who needs advisers. but our big banks are beloved by Minister O’Dwyer so wont be any change until govt changes.
WSAL and BTIM are licensed to give general advice not personal so if they used language such as “this si the right product for you” rather than “people in circumstances similar to your own may benefit from a product like this” then they have failed to meet best interest duty.. oh and failed to provide a statement of advice etc etc. I’m sure this campaign would relate to BT’s “Super for life” product but the reality is that any product provider with a direct market product risks this kind of investigation and penalty. How many industry funds run campaigns about super fund consolidation? How many clients lose important life insurance cover they forgot about thanks to this behavior? This isnt a bank problem it’s a legislative problem. So long as product providers are allowed to directly market these kinds of solutions there will be risks to consumers. None of the money saved by helping people reduce their superannuation costs will help the poor sucker who lapses their life insurance, tpd or salary continuance right before a serious life event.
So when will ASIC target the CBA and it’s subsidiaries for removing documents from client files during a dispute .Wash my mouth I shouldn’t dare think the ASIC has a love affair with the CBA and Whittaker Mcnaught the subsidiary of the CBA
Was this headline meant for a different article? This article seems to be about giving advice for which they were not licensed. Would be much more interested to read about cases that test the interpretation of best interests.
Until vertical integration is outlawed this will occur over and over and over again. Organisations must be required to choose between being a product provider or an advice provider and never both.
So once again one the big 4 tarnishes the reputations of the industry.