The High Court has today confirmed that licensees and representatives cannot rely on a general advice disclaimer where their broader conduct may cause clients to reasonably expect their personal circumstances were considered.
The High Court unanimously found Westpac subsidiaries, Westpac Securities Administration Limited (WSAL) and BT Funds Management Limited (BT), breached the Corporations Act by providing personal financial product advice in breach of their licences.
The proceedings stem from two telephone campaigns conducted by WSAL and BT where they contacted customers recommending they roll their existing superannuation funds into a Westpac-related superannuation account. Click here for an article by Selina Nutley with more details about the background of this case.
The Court said representatives gave personal advice to customers during the campaigns when they asked them about their objectives, then presented a recommendation they use the roll over service as if it were a "no brainer". Given WSAL and BT's financial services experience, the Court said customers might reasonably have expected representatives had taken into account the objectives elicited from the customer during the call when recommending the service.
The case will now return to the Federal Court to determine the penalties to be paid by WSAL and BT.
Our Funds Management team is available to provide training and assistance to customer-facing representatives and to ensure your systems adequately deal with this difficult issue. Please contact us if you need to discuss your concerns.