Last week, ASIC issued a report confirming in-house product bias within institutionally-aligned licensees between 2015 and 2017, finding that 68 per cent of all client funds across these businesses had been invested in products owned and operated by related entities.
Responding to ifa’s questions about the report, a spokesperson for ANZ said its internal review of in-house versus external product distribution had yielded different results to those of the regulator, but noted the bank was unaware of how ASIC gauged the numbers.
“Our assessment of the split between ANZ Financial Planning customers’ investments in ANZ products and those in external products is closer to 47/53 respectively, but we do not know what methodology ASIC have used,” the spokesperson said.
The bank said it also permits advisers to apply to recommend products not included on their APLs, and last year received 1,200 of these requests – an “overwhelming majority” of which the spokesperson said were approved.
The spokesperson added that the bank “will continue to work with ASIC and all the other regulators to help them with the important work they do to keep our industry secure and accountable”.
ANZ’s comments follow the release of an internal letter written by the bank’s chief executive, Shayne Elliott, addressing the royal commission into banking, superannuation and financial services.
In the letter, Mr Elliott said seeing all the bank’s instances of misconduct over the last decade laid out in a single document was “confronting”.
“It’s completely unacceptable that we have caused some of our customers financial harm and emotional stress. I’m ultimately accountable for this and once again apologise,” Mr Elliott said.
“Of course, it would be easy to lay the blame on a few bad apples or to say that these are largely historical technical glitches resulting from large complex IT systems. That would be wrong.”
Spokespeople for AMP and Westpac both told ifa to refer questions to the FSC, which has also challenged the investigative approach used by the regulator.
Neither Commonwealth Bank nor NAB responded to ifa’s request for comment.
The irony here is that just because an in house product of a vertically integrated dealer group / bank is used more often that one from another institution, that doesn’t make it a bad thing. In our business we use two main platforms / wraps, one just so happens to be owned by our (new) vertically integrated dealer group , the other not. The story here is we changed dealer groups , not because we liked product, but because we liked the service offering. So now we are running the risk of in house bias, when in fact nothing could be further from the truth. ASIC have a job to do, I get that, but they need to seriously review their methodology and understand that JUST because it’s in house, it doesn’t automatically mean it is as a result of bias. N one final note, having 10, 15 or more different platforms is messy and difficult to manage. Having a couple of well researched, and competitive platforms means economies of scale in our businesss which means lower advice fees to our clients.
interesting ANZ questions the methodology of ASIC when it has the finger pointed at its methods. But they were Iock-step with ASIC when their approach to “churn” resulted in cuts in commission. but to be frank I doubt whether the CEO has a clue what the issues are in the FP and life functions of ANZ. He would be reading a script provided by an exec covering his or her own backside.
Good on you ANZ for trying to answer these findings. I am in one of these so called biased dealer groups and I don’t even recommend their products. At least you have responded – I am so sick of these articles coming out trying to destroy the industry when it is under too much regulative pressure as it is. I say THANK YOU! And as for the IFAs who want to get on the band wagon and make this worse – you are idiots – platforms are very similar in their operations no matter who you go with and I challenge any IFA to tell me they use more than 3-4 platforms in their business. I also think if you were under a bank license and used their platform and there were issues you would either change dealergroup or do an off APL approval to use another one. Mine lets me and as I said they were mentioned as being biased to their own products. Its all rubbish designed to get the lay person to lose faith in the financial services industry.
report was into both the branded and ‘hybrid’ licensees so not sure why ANZ would just call out their own FP’s. I’ve said it before and I’ll say it again…. I believe Product providers / Licensees would prefer to just sell their products…too much hassle running a license when they know they are conflicted. Within 5 years I predict all will sell their Licenses either voluntarily or semi forced.
Aligning with the new education requirements date the government will want a full separation of Product and License.
BTW – this was me…Steve Crawford…not ‘anonymous’
Another dodgy FSC member. Enough said.