The ANZ Bank’s deputy chief executive, Graham Hodges, has apologised to a Senate Committee for the banking group’s failings around its Prime Access offering amid political and regulatory criticism that clients paid for financial advice they did not receive.
Addressing the Senate Economics References Committee yesterday, Hodges conceded that the problems around Price Access had been a “failure” and that the bank had not delivered contracted services to customers.
However, Hodges’ statement to the Senate Committee made clear that the bank had reported its shortcoming rather than it being picked up by the Australian Securities and Investments Commission (ASIC).
“In the first instance, we notified ASIC of our mistake and undertook a thorough review of all relevant files,” he said.
Hodges confirmed earlier bank statements that ANZ would now be contacting individual customers and paying compensation.
“To avoid a reoccurrence, we have improved training, upgraded technology and increased audit and supervision, as well as including the documented annual review as an essential component of performance assessment for our financial planners,” he said.
Elsewhere in his statement to the Senate Committee, Hodges appeared to signal that the ANZ was support of the type of last resort compensation arrangements being advocated by the Financial Ombudsman Service and also backed by key members of the Senate Economics committee, Labor Senator, Sam Dastayari and South Australian independent Senator, Nick Xenophon.
Hodges said ANZ believed financial planning businesses should hold appropriate levels of professional indemnity insurance and sufficient financial resources to ensure that customers impacted by poor advice could be appropriately compensated.
“I am aware that there have been people who have not been compensated because of the insolvency of the financial planner. There’s clearly a gap in this process,” he said. “Also the Financial Ombudsman Service’s submission to the financial system inquiry suggested ASIC establish industry-wide principles and operating guidelines for the implementation of major remediation programs, including interaction with independent dispute resolution arrangements.”
“ANZ supports these suggestions,” Hodges said.
