In a statement, ASIC said the Commonwealth Bank and ANZ have both agreed to pay a $1.25 million community benefit payment and change their superannuation distribution model after an investigation found branch staff offering unauthorised personal advice was “common practice”.
“CBA’s fact-finding process was called a ‘Financial Health Check’. CBA staff also sometimes helped customers roll over their other superannuation into the Essential Super account at the time of distribution,” ASIC said.
“ANZ’s fact-finding process was called an ‘A-Z Review’.”
According the statement, ASIC was concerned that the time between the completion of the fact-find process and the discussion about the relevant superannuation products (CBA’s Essential Super and ANZ’s Smart Choice Super and Pension) had led staff at both banks to give personal advice when authorised only to provide general advice.
“ASIC was concerned that customers may have thought, due to the proximity of the fact-finding process to the offer of Essential Super or Smart Choice Super, that the CBA branch staff or the ANZ branch staff were considering risks specific to the customer when this was not the case,” the regulator said.
“These court enforceable undertakings prevent CBA from distributing Essential Super in conjunction with a Financial Health Check and ANZ from distributing Smart Choice Super in conjunction with an A-Z Review.
“They also require CBA and ANZ to each make a $1.25 million community benefit payment. If there is a breach of the undertaking ASIC can, under the ASIC Act, apply for orders from the court to enforce compliance.”
The regulator noted that CBA chose to suspend distribution of Essential Super through branches in October 2017.
ASIC deputy chair Peter Kell said the regulator intends to keep a focus on the distribution of such products in the future.
“ASIC will continue to proactively monitor how complex financial products such as superannuation are sold,” he said.
Hey ASIC you forgot Westpac, they were doing this for a long time. They got caught by the Fin Review. I notice you did nothing to them and it was rife over there. Industry Funds is another kettle of fish. They are always taking fees and offering no service. Of course that is inline with dodgy unions who want to control Australians money and rip off their members. Royal Commission isn’t over yet, the best has yet to come with Industry funds going to have to show they aren’t as good as they portray themselves. They are a front for unions to bleed the Australian public.
Unlicensed staff providing personal advice with no Statement of Advice and receiving undisclosed performance related bonuses and holidays when KPI’s achieved !!!!!
Am I hearing this correctly???……..and that’s the END of it ??
WTF is going on here ?
The problem was they asked questions, if they had of just rolled over the super fund into an industry fund without asking questions then they were probably ok because it wouldn’t appear like being personalised advice. ASIC at its best again.
Yes a paltry fine. But for having the audacity to frame a contract making advisers liable for their own advice to control the commercial risk of operating a third party licencee, a contract similar to those we get from financial institutions, telcos, utility coys even the government, 400 businesses are shut down, 400 families financially distressed and probably 40,000 clients disrupted. The manner in which Dover was attacked and the manner in which the purported problem was dealt with is a disgrace. It is time to get rid of these Gestapo tactics and self righteous bureacracy and return to “due process” and the “presumption of innocence”. Why was Dover not given the opportunity to enter into an EU and then work through the issue in an orderly manner.
What a joke. This is a drop in the ocean compared to what the banks would have made in profit by this behavior and its not even a fine! A community benefit payment that will probably end up tax deductible too! If this had been a small adviser they would have had licence cancelled and life ruined but not the sames rules for the banks as far as ASIC concerned.
$1.2 million to a community benefit project. This should go to ASIC. [u]In short CBA is doing the crime but we’re paying the fine.[/u] Why are advisers expected to pay increased ASIC levies over the coming months. Why has my PI cover increased by 30% to 50% because of the banks. If you’re paying dealer group fees, perhaps go back to your licensee now and ask them what the fee is going to be when PI cover gets renewed and grandfathered commission ceases. Just ask them what the true cost per AR to run the licence is and that’s your fee in 2019/2020. A lot of planners are going to be shocked when their dealer group fees go up by 50%. How about this fine goes towards the industry to fund self regulation?
Planners instead of blaming CBA should be looking internally at themselves. We’ve got the FPA getting payments from the Banks, we’re so over regulated and people are forced to take advice from unlicensed sources. For too long we’ve sign a deal with the devil.
This is all becoming one big sad joke! Fair enough turn the spotlight on the banks as the Royal Commission has, but why is the media not focusing on the Industry Super Funds that have been guilty of this practice for many years. Given that it appears that they will no longer be called in front of the Royal Commission because apparently there is “no longer enough time in the hearing schedule”, plus the fact that no attention has been focused on them for their union links and hidden sponsorships, fees etc, I am starting to feel that there is some sort of conspiracy at play. Maybe the bigger conflict of interest that needs dealing with sits within Canberra! Whilst it is claimed the FASEA proposed standards will lift the outcomes for clients, they wont. An adviser is either ethical or they are not, end of story and whilst education broadens the mind and skill set, when it comes to behavior, its like trying to retrain an older dog. Those that disagree, fair enough, but question the real outcome out of all of this, as the its pretty clear the reality is going to be very different to the perception. If you are someone that likes to degrade the experienced, yet non-degree qualified adviser that has a great rapport with their clients, then go right ahead, but the reality is there will be no pot of gold or influx of new clients coming your way if all that is proposed gets put into action!
Well said agree 100% the Royal Circus had plenty of opportunity to address ISA and actively, blatantly and negligently chose not to. For all their posturing and BS tough questioning, they’re poitical peacocks doing the whims and wishes of the Labor party (as is ASIC). The rot has gotto stop, Kell smells!
Completely calculated risk, that fine is an absolute joke. Would have made far more than that from these practices already and get to keep the FUM it generated to provide a nice ongoing revenue stream from illegal activity.
That fine will be written off in the marketing budget until the next one they get for doing something similarly illegal.
Absolute joke.
These fines are petty cash and we all know the memory will forget all these “”little” mistake ((haha ) But we the adviser still have to cough up $$$s undisclosed as yet because WE have to pay the regulator for all their time and $$$ regulating these #$@^%&***. Give us a break and fine these $#$%^& properly so we don’t have to bear the costs. AND yes, if they look deep enough they will find further millions in fines for other actions as yet unreported. The same management is still there so nothing changes and in a few years it will be on again, get real Mr regulator and do the job properly.
How about all those telemarketers calling up and trying to sell Life Insurance under General Advice?
HOLY HELL! quote from the article…”CBA staff also sometimes helped customers roll over their other superannuation into the Essential Super account “….. NOT LICSENSED, NO SOA, NO REPLACEMENT WARNINGS, NO DISCLOSURES!!! ASIC and CBA you are a disgrace!
To true every word of it. Exactly what effect is slapping a million buck fine on a multi billion dollar profit organisation going to have? a big fat zilch!!
I worked at ANZ and couild never understand how a banker could open a simple super product for a client without taking into account their health goals etc always didn’t sit well with me…the same goes for industry funds just think of all the wrong they do when they give Personal sorry I mean general advice lol
Meanwhile in adviser land, you can be at severe risk because your SOA and File notes are slightly out of Sync 🙁
why doesn’t the regulator go and call a Macquarie Adviser – they will hear first hand how they get around general advice – they give you personal advice and then say – by the way this is general advice and feel this is sufficient – really poor and they keep getting away with it
I had a Westpac staffer tell me about BT and how easy it was to rollover but when I asked What should I do with my life insurance they scurried not to be seen if I didn’t know any better I could have rolledover lost my life tod and tsc which I had thanks to group policies with automatic acceptance I value this. I am uninsurable
And ASIC what about the Industry Funds providing over the phone advice for rollovers.
Oh but wait they are an Industry Funds and sell Super but they can do what ever they like as we don’t apply the law to Industry Funds.
Nor apparently the scrutiny of the farcical Royal Comm = what a joke that is/was!!! The panel of enquirers should be hung!
Did anyone experience walking into a Westpac Branch and have the tellers offer to roll your super into BT Super for life ?? Why is Westpac left out of this ? How many insurance policies and personal advice was provided by tellers and customer service reps of WBC ?
Westpac decided to fight that in court……decision pending…
Yes, and one suspects that with everything going on, Westpac will settle this with ASIC prior to heading into a court room, if they are smart that is…
What !!!! ASIC never knew??? ASIC should read this and other blogs and pickup reference to this bank abuse of that horrible rubbish – GENERAL ADVICE. Self-employed advisers have complained about this for years, but ASIC used to think the banks are “goody two shoes”, and look where that got them. Quell embarrassment at the RC, asleep at the wheel – again!. Maybe ASIC, like the ACCC practices in the past, will only investigate the wholesale abuse of GENERAL ADVICE, and blatant THIRD LINE FORCING, if they receive a complaint letter from THE CLIENT, not an adviser. Fat chance of that !
WHEN WILL ASIC WAKE UP – GENERAL ADVICE IS OPEN TO ABUSE IN THE HANDS OF THE BANKS
BAN GENERAL ADVICE !!!! Simples! Stop bonuses to telling and admin staff.
FFS, will this never end? Get the hell out of the industry as soon as you can, we’ve all had a gutful of learning about these shoddy practices. Meanwhile small business owners with their own AFSL, like yours truly, are petrified of doing anything wrong or missing a bloody signature on an application form, yet the big end of town tap-dances all over the Corpse of the Corps Act.
they are but…they just fined 1.25m each..they got taken to Court by ASIC and its the only reason you know about it. How is that tap dancing in this case? Not sure why they didnt put their staff through a one week FP course to get qualified.
Yes we know they are exiting the industry, just not fast enough. $1.25m is chickenfeed for a bank and they continually thumb their nose at the regulator. Same goes for any old hangers on in the industry that think giving advice is optional to be in an SoA, that taking funds from a client’s SMSF for property development is play on, that giving advice as an accountant but pretending to be a planner is fine. Get the f&$@ out of my industry, those grubs are ruining it for the rest of us and should go back to selling used Daewoo’s. The real, ethical and qualified planners will take it from here thanks.
Yes Felix, Too big to fail. Seriously they have stuffed this business. I am losing confidence by the day, waiting this financial year to see what FASEA and the RC findings are and then depending on the outcomes, I might be saying bye bye….
ASIC< you should be ashamed, how come you do know the obvious. This and all the other issues have been happening for years. But now you are acting and that also with a bias towards the small operator who is buried with compliance and so forth... but letting off these institutions with big pockets.
NAB is teflon
& rightfully so. They take compliance very seriously …. & are leaving the industry because of it. The numbers no longer stack up. If that’s not a massive warning sign to everyone else including ASIC then we all have our heads in the sand.