ASIC commences civil penalty proceeding against Westpac for poor financial advice

ASIC has commenced Federal Court proceedings against Westpac in relation to alleged poor financial advice in relation to one of its advisers.

In four sample client files, the adviser:

  • breached the best interests duty under the Corporations Act (the Act);
  • provided inappropriate financial advice; and
  • failed to prioritise the interests of clients.

Notably, this adviser’s conduct was not discussed in the recent hearings of the Royal Commission.

ASIC has brought proceedings against Westpac for a breach of:

  • the best interests duty under section 961K of the Act;
  • Westpac’s general licence obligations to:
    • do all things necessary to ensure that the financial services covered by its licence are provided efficiently, honestly and fairly under ss912A(1)(a); and
    • comply with financial services laws under ss 912A(1)(c).

Westpac has a significant remediation program underway in relation to this adviser’s conduct.

As at 14 June 2018, $12 million has been paid to clients affected by the poor advice and ongoing advice service failures. The proceeding is listed for a directions hearing in Sydney on 19 July 2018 at 9:30am.