Surge in dud advice
Townsville THE number of cases where ANZ financial planners were identified as providing bad advice surged fortyfold in less than a decade, the banking royal commission has heard.
And wealth manager AMP has been hit with the threat of three separate class- action suits in the wake of the shocking misconduct revelations uncovered by the commission last week.
As the second round of hearings resumed yesterday, it emerged the number of cases where ANZ staff were found to have provided inappropriate financial planning advice blew out dramatically over the eight years to 2016.
Counsel assisting the commission Rowena Orr, QC, tabled an internal audit document revealing there had been 60 such cases in 2008.
That number leapt over the following years and, in 2014, clocked in at 1401. In 2015, it hit a peak of 2810.
It then dipped the following year, but only to 2499 – still more than 40 times the tally in 2008.
Ms Orr presented the document to Kylie Rixon, the chief risk officer of ANZ’s wealth management division.
The document also revealed ANZ planners routinely failed in their obligation to act in customers’ best interests. It showed that, in ANZ’s financial planning division and at offshoots Millennium 3 and RI Advice, formerly RetireInvest, 5 per cent of files audited in 2015 flunked the bestinterest test.
Ms Orr questioned if the number of bad- advice cases had surged because ANZ’s detection systems had previously been deficient. She asked Ms Rixon if the bank’s monitoring systems were inadequate before 2015. The ANZ banker replied: “Yes.”
The audit report also revealed there were fears within the bank of systemic risk due to the problems in its system for monitoring planners.
ANZ was concerned staff could breach licence conditions, customers were at risk of receiving bad advice and that it might have to fork out $ 20 million in refunds.
Ms Rixon said it was “very regrettable” the bank had taken so long to fix its monitoring systems. “( ANZ) has reduced the risk but it has not come down to where we would like it to be,” she said.
Ms Rixon also revealed 71 financial planners had been “performance managed” in the past year and “more than half” had left as the bank increased financial- planning stan- dards. ANZ also removed revenuebased performance objectives for financial planners less than two weeks ago as it prepared for the commission, it emerged.
Ms Rixon said such measures accounted for 15 per cent of the performance “scorecard” for financial planners, but they were dropped on April 1.
Separately yesterday, law firms Slater and Gordon, Shine Lawyers and Quinn Emanuel Urquhart and Sullivan all announced they were considering launching class- action suits against AMP for allegedly with- holding information from investors. The wealth management heavyweight last week admitted to charging clients fees for services they did not get and misleading regulators about it 20 times.
AMP also admitted to manipulating a supposedly independent report into the debacle, commissioned by its board.
The company ment yesterday.
AMP shares fell another 3 per cent, down 13¢ to $ 4.17. They have lost a quarter of their value since early March. declined to com-