ASIC takes Westpac entities to court

Australian Financial Review Dec 22 2016 at 5:25 PM

Misa Han

The corporate regulator is taking the superannuation arms of Westpac, Westpac Securities Administration and BT Funds Management, to court alleging they have failed to act in the best interests of superannuation customers.

In the Federal Court proceedings filed on Thursday, the Australian Securities and Investments Commission says Westpac launched two telephone campaigns targeting superannuation fund members.

ASIC says during the campaigns, Westpac Securities Administration and BT provided advice on personal financial products, specifically recommending customers move out of their other superannuation funds into Westpac-related superannuation accounts.

Westpac Securities Administration and BT are not allowed to provide personal financial product advice under their Australian financial services licences.

It is the second case to come to court where ASIC has alleged failures of the "best interests duty" introduced under the Future of Financial Advice reforms. 

ASIC also alleges Westpac Securities Administration and BT did not undertake a proper comparison of the superannuation funds required by law.

ASIC said ASIC and Westpac will cooperate to limit the facts in dispute in the court case.

BT Financial Group Thursday rejected ASIC's interpretation of what constitutes general versus personal advice and said it would oppose the action.

ASIC's action concerns 15 customers calls. 

The group said it believes it has met all requirements under a general advice model and has not failed any 'best interest' obligations.

The first hearing will be held at 9.30am on February 2, 2017.