ANZ agrees to enforceable undertaking

The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from ANZ, following a finding by the regulator that the bank had failed to provide documented annual reviews.

ANZ did not give reviews to more than 10,000 ‘Prime Access’ customers from 2006 to 2013. A key part of the Prime Access package, which was a service package offered to financial planning customers for an annual fee from 2003, was the provision of a documented annual review of the customer’s financial plan.

Specifically, the ASIC investigation found that:

• ANZ had failed to provide documented annual reviews to more than 10,000 Prime Access' customers who had paid for those reviews;
• ANZ did not have adequate systems and processes in place to ensure that the Prime Access Service, including the provision of documented annual reviews, was provided to Prime Access customers;
• from as early as 2008, ANZ Financial Planning was aware of a number of confirmed instances in which documented annual reviews had not been provided to Prime Access customers, and that there was a risk of a broader issue in relation to further Prime Access customers not being provided with documented annual reviews, but the conduct continued until 2013, and ANZ did not breach report the conduct to ASIC until August 2013; and
• ANZ failed to comply with section 912A(1)(a) of the Corporations Act which provides that a financial services licensee must do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly and a condition of its Australian financial services licence.

ANZ acknowledged that the regulator’s concerns were reasonable held when agreeing to the undertaking. Amongst other things, the EU would require ANZ to:

• pay a community benefit payment totalling $3 million;
• provide an audited attestation from ANZ senior management to provide 'reasonable assurance' that the bank has, since 2014, provided documented annual reviews to customers who were entitled to such reviews; and
• provide further audited attestations from ANZ senior management as to the improvements that the bank has made to its compliance systems and processes, and that the design and implementation of those systems and processes will seek to ensure documented annual reviews are provided in accordance with the ANZ Prime Access package.