High Court delivers key decision on personal advice
In a key decision on the distinction between personal and general advice, the High Court of Australia has dismissed an appeal lodged by Westpac around a 2016 Australian Securities and Investments Commission (ASIC) claim that the bank had provided financial product advice.
The ASIC action concerned Westpac Securities Administration Limited and BT Funds Management and related to calls to 14 customers concerning the rollover of their external superannuation accounts.
The High Court found that Westpac had provided “personal advice” in calls it made to customers concerning the rollover of their external superannuation accounts.
The High Court found that, in doing so, Westpac had breached the Corporations Act.
Westpac has acknowledged the High Court’s decision and noted that it provides important guidance on the distinction between general and personal advice.
The High Court held that despite the arguments of Westpac that the bank gave financial product advice to each member that was intended to influence them in making a decision in relation to a particular financial product in circumstances where a reasonable person might expect Westpac to have considered one or more of the member’s objectives, financial situation and needs.
“The subject matter of the advice, the nature of the relationship between Westpac and its members, the purpose and tenor of the calls, and the members' objectives, together with the form, content and context of the financial product advice seen in light of a number of other considerations, compel the conclusion that the financial product advice was personal advice within the meaning of s 766B(3)(b),” the High Court decision said.
“The subject matter of the financial product advice concerned the consolidation of multiple superannuation accounts, a significant financial decision.”
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
