Major banks in trouble over super

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

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