ASIC has announced that it has accepted court enforceable undertakings from CBA and ANZ under which the banks have agreed to change the way they used a fact-finding process to proceed to give personal advice in relation to superannuation. Branch staff for both CBA and ANZ were only authorised to provide general advice.
The court enforceable undertakings prevent CBA from distributing Essential Super in conjunction with a Financial Health Check and ANZ from distributing Smart Choice Super in conjunction with an A-Z Review. They also require CBA and ANZ to each make a $1.25 million community benefit payment.
ASIC investigated CBA’s distribution of its Essential Super product and ANZ’s distribution of its Smart Choice Super and Pension product (Smart Choice Super) through bank branches. ASIC found a common practice of offering those products to customers at the conclusion of a fact-finding process about customers’ overall banking arrangements.
CBA’s fact-finding process was called a ‘Financial Health Check’. CBA staff also sometimes helped customers roll over their other superannuation into the Essential Super account at the time of distribution.
ANZ’s fact-finding process was called an ‘A-Z Review’.
ASIC was concerned that the proximity between the fact-finding process and the discussion about Essential Super or Smart Choice Super was leading CBA staff and ANZ staff to provide personal advice to customers about their superannuation.
ASIC was concerned that customers may have thought, due to the proximity of the fact-finding process to the offer of Essential Super or Smart Choice Super, that the CBA branch staff or the ANZ branch staff were considering risks specific to the customer when this was not the case.
CBA chose to suspend the distribution of Essential Super in CBA branches in October 2017.