Yesterday, the bank announced that 8,500 customers of its Prime Access financial planning service will be eligible for refunds after a “review” found they had not received annual review documents they had paid for.
ANZ general manager for advice, Neil Younger, told consumer group Choice that the annual review – for which clients paid an approximate upfront fee of $3,500 – was “not essential” to the ongoing management of client portfolios.
“At a macro level, we don’t believe there has been any detriment, but I can’t account for every individual,” Mr Younger said in a statement on the Choice website.
The bank has chosen to embark on the major refund project because it “did not meet its contractual documentation requirements”, Mr Younger said, not because of inappropriate advice.
In a separate statement, Choice’s chief executive Alan Kirkland described the incident as an “epic fail” and said it was more broadly reflective of problems in the advice industry.
“While basic legal protections were recently put in place for people seeking financial advice, this is an industry that has been taking advantage of its customers for decades,” he said.
The announcement of a $30 million refund project also attracted the attention of Labor Senator Sam Dastyari, who is due to preside over a hearing in the Parliament next week which will see senior executives at the major institutions questioned over financial planning scandals.
“This is quite significant,” Senator Dastyari said on Twitter. “ANZ are in public hearings next week. ASIC is looking at all the banks.”
Fairfax reported yesterday that while NAB’s Andrew Hagger – who was recently grilled by the same committee – and representatives of the Commonwealth Bank and ANZ will appear before the committee, AMP and BT Financial Group are seeking to negotiate alternative appearance dates.
ANZ’s announcement comes as the corporate regulator has issued an update to its probe into the largest financial advice providers, which has found “multiple instances” of fees being charged for advice not provided.
Gee Frank, another quality contribution from you. And quoting Bolt Report, well, not much else to add really.
Good old fee for service eh…that should fix everything, right? I seem to recall vividly when FoFA came out in all its glory with opt-in and FDS. ANZ came out and said it was great, they fully support it and are 100% ready to run with it ahead of schedule, full disclosure and all. Dear oh Dear.
Oh Pavel – raising your head out of the ISA quagmire for another bleating about the big bad banks? Now if only the ISA fee and undertable kick back structure were as transparent as your motives then perhaps it wouldn’t just be the banks having to make compensation.
Hilarious how you are happy to trash someone being accountable and making good, yet all the rorting as discussed on the Bolt Report are buried deeper. Sure every one of those fees ISA clients pay, knowingly or not, are all for their benefit right?
Once again thanks for bringing the comedy back to this media source.
A review with an ANZ Planner is very valuable (for the Planner) because it gives them an opportunity to sell the client another ANZ product.
Anne, your right, gob smacking arrogance. ‘No harm done’ in charging thousands of dollars for something not provided? And what of the opportunity cost suffered by these victims? I trust Senator Sam reads this howler as I’m sure he’d love to test ANZ’s CEO’s support for this unbelievable utterance at his committee’s enquiry next week
No harm done !! What arrogance !! Didn’t he do a stretch at the Commonwealth with Mr Barrett ? Anyway, I assume clients who paid the money feel that ‘no harm done’!!! Or do they feel that they where paying for ongoing monitoring and advice ?? What will be done if there personal circumstances had changed and there view to investment risk had changed and corresponding risk profile ?? What recourse will they have if they have ‘lost’ money ??? Great attitude – ‘no harm done’ Wonder when they first new of this ????
Ha ha ha ha…..Neil mate….you’ve just supported the notion that an ANZ portfolio review is worthless.
Obviously in any given year nothing happens to a clients objectives, needs or requirements.
Youve gotta wonder sometimes.
No harm done! Except that the clients were cheated by paying for something they thought was a premium product they were getting and got nothing. Zip. But I’ll bet the bonuses were paid up the line for this “no harm done” product.The arrogance of this bank is stunning.
If Choices chief executive Alan Kirkland is going to comment on this he should know that a client’s advice is throughout the year with phone calls, rebalance conversations, withdrawal requests,etc. Then the drafting of documentation relating to those actions.
The ongoing service is not all bundled into a 90min review conversation once a year.
Neil Younger’s comments would be funny if they were serious. The fact that he claims an annual review is “not essential” makes it plain for all to see the lack of understanding of the advice business by the players that hold the power and control through vertical integration and market share. You reap what you sow.
hmm, an upfront prime access fee. what about the trail? If the $3,500 prime access was “not essential” why keep charging it. Good one Neil.