It revealed that three quarters of all financial advice provided by the big 4 banks and AMP was in breach of the law, particularly the duty to act in a customer’s best interests and the duty to provide appropriate advice.
The report found that on average the big 4 banks and AMP recommended customers invest in in-house product almost 70% of the time and advice was more likely to be unlawful where advisers recommended an in-house product instead of an external product.
An in-house product is a super fund, insurance policy, or other investment product that is owned by the same bank that the financial advisor works for. This practice is sometimes called ‘vertical integration’ and it has led to devastating outcomes for thousands of Australians.
Advisors often lacked the knowledge to properly consider a customer’s existing financial product such as the existing super fund.
Conflicts of interest by advisors are not being appropriately managed – advisors are often incentivised to sell their bank’s products in preference to a perfectly good external product, without properly explaining the reasons to the customer.
You may have a legal claim for compensation if you received financial advice from an advisor affiliated with one of the following organisations:
- AMP Limited (AMP)
- Australia and New Zealand Banking Group Limited (ANZ)
- Commonwealth Bank of Australia (CBA)
- National Australia Bank Limited (NAB)
- Westpac Banking Corporation (Westpac).
It’s not always clear whether you financial advisor is licenced through one of these companies because they often use different names. If you’re not sure we can help you find out.
Read a summary of ASIC’s report.
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Kim Shaw
Executive Director, National Head of Personal Legal Services, Melbourne'I am passionate about helping people know their rights and ensure they receive their lawful entitlements at a time of significant disruption and anxiety in their lives.'
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