CBA, ANZ told to clean up superannuation distribution

An ASIC investigation alleges Commonwealth Bank and ANZ branches offered superannuation products to customers at the end of general fact-finding processes, which the customers may have mistaken as "personal" advice rather than "general" advice.

Commonwealth Bank and ANZ have acknowledged they have entered enforceable undertakings from the corporate regulator.

Both are paying $1.25 million towards community.

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.

It found that it was a "common practice" for the branches to offer superannuation products to customers after a basic fact-finding process (CBA's Financial Health Check and ANZ's 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," the regulator said.

Branch staff for both CBA and ANZ were only authorised to provide "general" not "personal" advice, the regulator added.

"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," it said.

Banks respond

CBA said it has taken steps to remove the risk that the sale of Essential Super could be linked to personal advice.

"CBA will not recommend Essential Super or another super product immediately before, during, or immediately after, or in conjunction with, a Financial Health Check or any other similar needs based conversation that we may introduce in future," the bank said in a statement.

CBA withdrew Essential Super from branches in October 2017.

It said it has paused all new account openings and will undertake a review of how Essential Super is offered and develop a revised conversation framework.

ANZ said starting August 18, its staff members will no longer discuss ANZ Smart Choice Super immediately before, after, during or in conjunction with a needs-based conversation with their customers.

"While we are confident our staff members have been following a robust compliance process, which has been confirmed through random customer surveys, we acknowledge ASIC's concerns that customers may have regarded this as personal advice, and have agreed to change our distribution process," ANZ group executive wealth Alexis George said.

ANZ's Smart Choice Super will remain available through ANZ's digital channels, and the ANZ app with no change for existing customers' accounts, investments or insurance because of the ASIC undertaking, the bank said.

The ASIC investigation comes as a part of its October 2014 Wealth Management Project.

It focuses on the conduct of the largest financial advice firms in Australia, identified as NAB, Westpac, CBA, ANZ Macquarie and AMP.

Updates with CBA, ANZ response 3:10pm

Read more: CBAASICEssential SuperSmart Choice SuperCommonwealth BankFinancial HealthA-Z ReviewANZ MacquarieAustraliaNABPensionWealth Management ProjectWestpac
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