October 29, 2019
The Full Federal Court has upheld an appeal made by ASIC around an earlier decision of the Federal Court regarding Westpac subsidiaries, Westpac Securities Administration Limited (WSAL) and BT Funds Management Limited (BTFM).
ASIC’s appeal concerned the Federal Court’s decision regarding the meaning of ‘personal advice’ in the Corporations Act, including the finding by the Court that WSAL and BTFM did not provide personal advice to 15 customers in two telephone campaigns conducted by members of Westpac’s Super Activation Team.
In the earlier hearing, ASIC alleged that during two telephone campaigns, WSAL and BTFM provided personal financial product advice to customers, specifically recommending that customers roll out of their other superannuation funds into their Westpac-related superannuation accounts. The regulator noted neither of these Westpac subsidiary firms is permitted to provide personal financial product advice under their Australian financial services licences.
…the decision …provides clarity and certainty concerning the difference between general and personal advice
In its original decision in December last year, the Federal Court found that WSAL and BTFM breached the Corporations Act (section 912A(1)(a)) but that ASIC did not make out its case that ‘personal advice’ was provided to 15 customers.
The Full Court reversed that decision this week, finding that in calls to 14 of the customers, Westpac staff did indeed provide them personal advice, in breach of WSAL and BTFM‘s Australian financial services licences.
The Court also found that WSAL and BTFM, by providing personal advice to their customers, failed to comply with other financial services laws in the Corporations Act, including the ‘best interests duty’.
ASIC said it welcomes the decision of the Full Court, which it says provides clarity and certainty concerning the difference between general and personal advice for consumers and financial services providers.
The Full Court was unanimous in its decision.