Major banks in trouble for offering unauthorised super advice

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The Australian Securities and Investments Commission (ASIC) has found that customers were sold superannuation products from staff unauthorised to provide personal advice.

ASIC said that the Commonwealth Bank’s distribution of its Essential Super product and ANZ’s distribution of its Smart Choice Super and Pension product (Smart Choice Super) followed fact-finding processes about clients’ financial arrangements.

The Commonwealth Bank’s fact-finding process was called a ‘Financial Health Check’. Commonwealth Bank staff also sometimes helped customers roll over their other superannuation into the Essential Super account at the time of distribution.

ANZ’s fact-finding process was called an ‘A-Z Review’.

ASIC was concerned that the proximity between the fact-finding process and the discussion about Essential Super or Smart Choice Super was leading bank staff to provide personal advice to customers about their superannuation when they were only authorised to provide general advice.

Both banks have now accepted court enforceable undertakings to change the way they distribute superannuation products to their customers.

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 Commonwealth Bank branch staff or the ANZ branch staff were considering risks specific to the customer, when this was not the case.

These court enforceable undertakings prevent the Commonwealth Bank from distributing Essential Super in conjunction with a Financial Health Check, and also prevent ANZ from distributing Smart Choice Super in conjunction with an A-Z Review. They also require the Commonwealth Bank and ANZ to each make a $1.25 million community benefit payment.

Do you have either of these super products? Were you offered these products after a fact-finding process? Did you think the person you spoke to was offering you personal financial advice?

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Written by Ben

20 Comments

Total Comments: 20
  1. 0
    0

    This is not new
    All disclosed during RC and the issues resolved

    • 0
      0

      Oh sure – a paltry community fine and the customers who may have been disadvantaged now have to take separate legal action to recover their losses. The Banks should be forced to investigate each advice and if at loss then recompense each customer. But as usual ASIC take the soft cock action that they think the public will swallow.

      You’re a troll on this site. Get off!

    • 0
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      “After due consideration of the gravity and impact of your crimes without recourse to victim impact statements, and taking into account your utter lack of remorse – you are hereby sentenced to work in the banking industry for life, or until such time as you retire or resign or are sacked….. court will rise!”

    • 0
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      Now hang on a minute. ASIC was CONCERNED that..” the proximity between the fact-finding process and the discussion about Essential Super or Smart Choice Super was leading bank staff to provide personal advice to customers about their superannuation when they were only authorised to provide general advice.”

      How distant should the proximity between the processes exist?
      If I went into a bank asking the staff for a suitable product for my needs, then am I not allowed to tell them? Am I not allowed to ask for a suitable product? Do I need to return in 24 hours? Next week?

      The bank staff were doing nothing wrong, they were simply laying out the facts. If ASIC had evidence that bank staff were doing a risk profile assessment without proper authority then they would have said so in my opinion.
      I’m not sticking up for the banks, just interpreting the facts.

    • 0
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      Shareholders are always going to stick up for their companies. It’s human nature. They have paid very nice dividends and capital gains for years now so the loyalty is well justified.

    • 0
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      True Rae . The banks have always looked after its shareholders and customers.
      Bank bashing is just a ploy by labor to win votes

  2. 0
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    Apologists please – someone needs to defend these poor suffering banks as a mainstay of the economy – paging the apologists…

    Power/privilege/opportunity corrupt – and absolute…

    Shows the need for a balance of ‘capitalism’ and regulation(‘socialism’)…. and what utter nonsense some use to fit into those terms.

    • 0
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      Ok Trebor, I will take the bait. So tell me, do you have a superannuation account? How much are you prepared to refund from your earnings over the last, lets say, 10 years to compensate the victims of the bank malfeasance? Yep, thought not. You will hang on to all the benefits (of so called crime), accrued by your superannuation account, but not prepared to be part of the redress to the so called ‘victims’ of the banks’ apparent bad behavior. Isn’t that a bit hypocritical, old boy?

  3. 0
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    A paltry fine. Did Branch Staff lose their jobs for providing financial advice? That is what would have happened in any other organisation. At the time they were probably rewarded with bonuses for meeting their KPI s.

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      I’ll never forget the guy put on ‘administrative leave’ over his dreadful and self-serving ‘advice’ to customers who lost hugely – and who was on full pay and awaiting a ‘stress retirement’ of $300k a year or similar…

      Jesus God…. I’ve missed my vocation…. should’ve been a Chee Ting Rat….

    • 0
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      Lot’s of staff losing their jobs around here. My bank has closed two branches in very busy locations and shut down the ATM at the local supermarket. I’m a bit worried about the bank actually. That’s a sign of a problem surely.

  4. 0
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    Back in the early 80s I took a redundancy and rolled over my super into NAB, little did I know that I would be ripped off by thousands for entry fees and exit fees cost me around 15grand for about 6 months rollover NAB needs to be looked into

    • 0
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      sarge, did you not get a prospectus? And they didn’t tell you any details of where your retirement savings were going? That is just plain wrong.

    • 0
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      We are checking out an amp fund the son in law is in that returned 1.36% this last financial year. Something very wrong there.

  5. 0
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    Just another “pile on” to the big banks.
    There is an old adage viz. “ a fool and his money are soon parted”.
    I, for one, am sick and tired of people who are either too careless or too lazy to spend time assessing their own circumstances and/or testing external advice and/or seeking second opinions therefor.
    And then, they wish someone to compensate them for their own irresponsibility and lack of interest – typically from my taxpayers money.
    The individual always makes the final decision and signs their own signature and should take personal responsibility, not try to do blame others.
    Another old adage “if it looks to good to be true it probably is”.
    Time to lay off the banks and let them get on with underpinning our economy and our/my superannuation.

    • 0
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      yep – agree 100%

    • 0
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      NAB, I have to agree with you that individuals need to take responsibility for their own decisions.

    • 0
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      Yes. The time I believed the bank manager and then ended up in huge debt as the banking crisis unfolded taught me a valuable lesson. I didn’t blame the bank for lying, I’m sure they we desperate then, but myself for trusting a word they say. Use diligence and if not sure then walk away. No deal or dividend is worth losing large sums of capital and I owe the banks no loyalty at all.

      I’m ready to close my account at one of the big 4 as I’m very sure they are in trouble. Closing too many outlets in very popular spots is a sure sign of trouble in any business.

      We need to watch the signs carefully as you say. The RC has proven there is little honesty in the financial system these days and that loyalty is unrewarded. So buyer beware at all times.

  6. 0
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    wish this site would put up the question “how would you look after your money”, be very interesting to read the answers, my answer is simple, always remember that great saying” a fool and his money are soon parted” and work on that principle, never believe a paid advisor and special those who work for a financial institute

  7. 0
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    and as for the second comment in this column, ” you’re a troll on this site, get off! ” mael, it is comments like these who are showing the true nature of the person making those comments!!!!!!!!!!!


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