ANZ issues last minute RC submission correction

ANZ issued a correction to its submissions to the Royal Commission over the weekend ahead of the next fortnight's hearings on financial advice.

Senior Counsel Assisting Rowena Orr said the Royal Commission was provided with a correction by ANZ on Sunday as to errors made on the number of authorised representatives identified as failing to provide periodic review services over a specific period.

In its original submissions, ANZ identified four financial advisers that failed to provide documented annual reviews to 691 customers between May 2013 and April 2016.

"In the corrected submissions provided over the weekend, ANZ acknowledged the failures actually involved eight authorised representatives, periodic reviews rather than annual reviews, and 813 rather than 691 customers," Orr said.

In its submissions, ANZ acknowledged at least 56 separate events relating to improper conduct by financial advisers.

These include instances of forged customer signatures; customers being impersonated; fraudulent uses of Powers of Attorney; falsely witnessing documents; and the transfer of client funds into advisers' personal bank accounts.

ANZ also admitted that from 2003 to 2015, certain associated entities deducted fees from the accounts of about 2900 members of managed investment schemes and superannuation funds.

The fees were supposed to be for ongoing services provided by a financial adviser, but none of the members were allocated a financial adviser and therefore didn't receive any services. The total amount deducted from these members' accounts was $931,647.

Further, between June 2007 and August 2016, service fees were deducted from customer accounts in amounts or at rates in excess of those quoted in their service agreements. This impacted about 4035 customers to a total cost of $4.5 million.

At the same time, ANZ also continued to deduct fees from the accounts of certain customers who had cancelled their services, with the total number of customers involved still yet to be determined. At this stage, ANZ estimated 198 customers were impacted at a cost of at least $564,000.

In regards to inappropriate advice and improper conduct, ANZ said it had identified 39 advisers employed or authorised by ANZ guilty of such misconduct between 1 January 2009 and 7 July 2015. An additional 40 reports were made to ASIC by ANZ between 1 July 2015 and 31 December 2017 in regards to 41 advisers.

These reports were in relation to improper use of client funds; misleading conduct in regards to qualifications or authorisations; falsifying customer or compliance documentation; deliberate overcharging of fees; providing poor advice; and failures to comply with disclosure obligations.

There were at least 30 events of misconduct or potential misconduct in relation to the appropriateness of advice, Orr said.

"This included advice that was provided with a lack of a reasonable basis; advice that was of little or no benefit to the customer but generated fees for the adviser; cases where there was no evidence that sufficient research was undertaken prior to providing the advice; and cases where advisers did not accurately disclose fees," she said.

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Read more: ANZRoyal Commissionfinancial adviceASICMillennium3RI AdviceRowena Orr
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