The Federal Court has handed down a $10.5 million penalty to Westpac in relation to proceedings brought by the corporate regulator on the provision of financial product advice.
The penalty related to proceedings brought by the Australian Securities and Investments Commission (ASIC) in 2016 for personal advice that was found to have been provided in relation to calls to 14 customers concerning the rollover of their external superannuation accounts.
ASIC found this was in breach of certain provisions of the Corporations Act by Westpac Securities Administration and BT Funds Management.
Westpac said the penalty was fully provisioned in its first half 2021 accounts.
“We take our obligations to our customers very seriously," a spokesperson for Westpac said.
"This was a test case brought by ASIC against Westpac Securities Administration Limited and BT Funds Management Limited in relation to 14 customers concerning the rollover of their superannuation accounts.
"It was an important process for the financial services industry to provide clarity on the distinction between the provision of ‘personal’ and ‘general’ advice when speaking with our customers. The findings in this case have provided that clarity.”
Comments
“We take our obligations to our customers very seriously," Really? I notice new buzzwords coming up these days. Another is "we're here to help". Well Westpac, if this is your idea of help and understanding your obligations, I'd hate to see your bad days.
$10.5 million fine ?? Westpac gained over $600 million in new FUM... what a good deal, paid for in less that 2 years of product management fees. If it was a financial adviser, they would be fined and banned. softy softy on financial institution, sympathies for getting caught, blame a whistleblower
Bet no Westpac senior executive was sacked.
Same as state super, however they are facing fines on 32,000 members for fee for no service at 1m a pop. Hopefully there are enough retained profits to pay that out....
Pity the financial planners who the Liberal government make fund ASIC's court battles despite having nothing to do with them. Talk about taxes for no service. This Liberal government is corrupt.
Excellent. I recommend the fine proceeds be applied to meet successful FOS/AFCA complaints that have not been compensated owing to advisers going out of business. Any balance can fund an independent report to investigate if anybody, anywhere in the world, can cleanly and clearly enunciate the difference between general/factual advice and personal financial advice. Said report to be vetted by a range of practicing advisers and tested in a wide range of public focus groups.
That'd be penalty money well spent.
Well, well what a surprise that super funds have been providing personal phone advice under the guise of general advice.
I would hope that ASIC takes a look at industry funds doing the exact same as opposed to suggesting nothing to see here!!
The other worry is these exact funds are now pushing intra fund advice with out BID obligations as a solution to advice affordability.
I'd like to see ASIC look at Industry Super funds that contact Australians and say "we found your lost super"
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