ASIC takes action against Westpac entities

The Australian Securities and Investments Commission (ASIC) has taken action against Westpac subsidiaries, Westpac Securities Administration Limited (WSAL) and BT Funds Management Limited (BTFM), for their telephone sales campaigns aimed at superannuation fund members and a number of contraventions.

According to ASIC, both entities had provided personal financial product advice to customers and recommended them to "roll out of their other superannuation funds into their Westpac-related superannuation accounts", although they were not permitted to provide personal financial product advice under their Australian financial services licences (AFSLs).

Additionally, they had failed to comply with the ‘best interests duty', introduced under the Future of Financial Advice (FOFA) reforms.

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ASIC also alleged that Westpac entities had not undertaken a proper comparison of the superannuation funds as required by law.

BTFG rejected ASIC's interpretation of ‘what constituted general versus personal advice' and said it would ‘vigorously oppose the action ASIC had brought against it'.

The company also disagreed with ASIC's legal interpretation that some of their customers may have thought they were receiving personal, rather than general advice.

According to BTFG chief executive, Brad Cooper, the company had built programs to inform and support customers to consolidate or roll over their superannuation fund as the consolidation was in the best interests of Australians and along with regulators and industry.

"More and more we are finding people want to have a natural and practical conversation without having to pay for comprehensive personal advice," he said.

"BTFG conducts superannuation campaigns with the purpose of assisting its customers to consolidate their superannuation accounts. These campaigns involve existing customers contracting BTFG to request more information in relation to their decision to consolidate,"

"In each of the 15 conversations ASIC is using as the base of its case, our customers were given a ‘general advice warning' as is standard and a required part of our purpose."

ASIC's investigation found 15 examples of alleged contraventions of the ‘best interests duty' arising from two telephone campaigns instigated by WSAL and BTFM.

The allegations stated that WSAL and BTFM had:

  • Failed to do all things necessary to ensure that the financial services covered by their licences were provided efficiently, honestly and fairly;
  • Failed to comply with the conditions of their licences which only permits those licensees to provide general advice; and
  • Failed to comply with the financial services laws in the Corporations Act.

ASIC and Westpac would continue to cooperate to limit the facts in dispute in the proceedings while the first hearing is scheduled for February in the Federal Court in Sydney.

ASIC said that these proceedings were a part of its Wealth Management Project, focusing on the wealth divisions of the major banks, AMP and Macquarie.

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Haha so basically they gave personal advice but then thought it would be all good to not do an SOA, meet best interest duty etc because they slapped a general advice warning at the end.

What are they Accountants?

Will be an interesting case - if the ASIC go this track then realistically there are no grounds for a carve out from advice for the ISA funds that do this all the time. One rule, level playing field or else, why not? "Consumer protection" can't be limited to only some, or only used for cases against banks,

Yes - I look forward to the outcome. Pity it will be in 2023 based on previous timetables....

Providing intrafund advice on a members existing product is one thing, providing 'general' advice to purchase a new product and then recommending (sorry suggesting) that same individual close their other existing product in favour of it is probably quite another, not exactly surprising that ASIC wasn't going to by the general advice warning on that one.

Coming out publicly in defence of indiscriminate, non advice, teller based product selling as "just trying to help consumers with their super" lol, are our industry executives still that stupid?

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