Banking royal commission: ANZ “indifferent” about welfare of super customers

ANZ was “indifferent” as to whether customers were better off with its super products, the banking royal commission has heard, amid new revelations the corporate cop investigated the lender.

ANZ is in the spotlight.

ANZ has been accused of being “indifferent” as to whether customers were better off in its superannuation products amid revelations the corporate cop investigated the bank over its selling strategies.

The lender’s own staff flagged concerns that sales processes weren’t meeting regulations and it could be in breach of aspects of ANZ’s licence, the banking royal commission has heard today.

ANZ CUTS HOME LOAN RATE, SNUBS EXISTING CUSTOMERS

ROYAL COMMISSION: ANZ PUT PROFIT BEFORE CLIENTS

The commission also heard the corporate cop, the Australian Securities and Investments Commission, was concerned ANZ was labelling one of its higher-fee super funds as a low-fee MySuper product.

ANZ head of superannuation wealth products Mark Pankhurst said the higher-fee product had been labelled as a MySuper product by mistake.

An inner-city branch of ANZ. Picture: Hollie Adams.

“I believe there was an error — there was a wrong label in a video,” he said.

Counsel assisting the commission Michael Hodge, QC, said there were two super products ANZ sold labelled SmartChoice.

As one of those was a MySuper product, they could be confused, he said.

ASIC said in one critique of the bank’s practices that customers could end up in funds that were less suitable than their existing funds.

Mr Pankhurst said: “I would agree with that statement”.

ANZ wealth management division OnePath had brought in about $2 billion of super funds through rollovers and contributions, he said.

Mr Hodge also said ANZ was “indifferent” about its selling procedures around super products.

He noted ASIC cracked down on ANZ getting branch staff to promote super products during an “A to Z” assessment of customers’ financial situations.

Under Australian law, frontline bank staff cannot offer financial advice without proper qualifications.

Mr Pankhurst said he did not know this had happened at ANZ.

ANZ chief Shayne Elliott.

“This was a surprise to me,” he said. Mr Pankhurst said he heard about the practice during his preparation to appear at the royal commission.

The process was later excluded from the “A to Z” review. But ASIC still had concerns super products were being marketed by staff in meetings with customers.

ANZ frontline staff would end the “A to Z” advice section of their meetings with customers and then offer them super products, the royal commission heard.

Mr Pankhurst said ASIC had problems with the “proximity” of the super sell to the other advice — which was in part based on an assessment of customers’ spending habits and goals.

The practice was “amended two years after ASIC raised concerns about it”, Mr Hodge said.

He also showed ANZ’s own “mystery shopper” checks on how staff were selling the product had flagged serious problems.

The ANZ executive said staff were retrained after the concerns were identified.

Mr Pankhurst disagreed that the bank was “indifferent” to customer needs.

“Indifferent is not a word I am comfortable with,” he said.

“It is saying, ‘if you need a product, this is one we have’.”

Mr Pankhurst said a full range of super products hadn’t been offered.

ANZ agreed with ASIC last month to take a series of steps to amend its practices.