The Federal Court has ordered Westpac Bank subsidiaries Westpac Securities Administration Limited (Westpac Securities) and BT Funds Management Limited (BT Funds) to pay a combined penalty of $10.5 million for failing to act in their clients' best interests.
The penalty follows the High Court's unanimous decision on 3 February 2021 that Westpac Securities and BT Funds breached their best interests duty when they provided personal financial product advice in calls made to 14 customers, despite neither firm being licensed to provide personal advice (21-013MR).
ASIC Commissioner Danielle Press said, 'Westpac was actively conducting a sales campaign aimed at rolling customers from their existing superannuation accounts into Westpac superannuation products. In doing this, Westpac failed to act in the best interests of their customers.
'Consumers' decisions about their superannuation are significant long-term financial decisions affecting their retirement income. Financial institutions seeking to influence those decisions by providing financial product advice, must comply with the law designed to protect consumers. The penalty of $10.5 million handed down related to calls made to just 14 consumers and should act as a strong deterrent to any entity breaching these provisions of the law,' Commissioner Press said.
An ASIC investigation found that Westpac Securities and BT Funds conducted two telephone campaigns which recommended that customers roll out of their other superannuation funds into a Westpac-related superannuation account.
Justice O'Bryan has yet to publish the reasons for his decision.
