As the Royal Commission into the finance and banking industry continues, the firing line expands.
Colonial First State (CFS) - intra-fund advice conflicted
CFS has agreed that it dropped its community standards after a communication appeared to dissuade people from moving into a cheaper default option. One financial adviser has been banned due to this event. Peter Chun and Linda Elkins were grilled regarding why CFS, a subsidiary of the Commonwealth Bank (CBA), had mishandled the transition of some members to MySuper products.
Catholic Super and the Australian Catholic Superannuation Retirement Fund (ACRF) merger blunders
Commissioner Kenneth Hayne quizzed ACSRF and Catholic Super as to why they didn't go through with the merger despite the move having clear benefits for members, after discovering that the executives were worried about losing their jobs. During questioning, it was revealed that squabbles broke out at the last hurdle regarding which fund would merge into which, with executive roles not guaranteed in the new entity.
HostPlus under fire for promotional spending
Industry fund HostPlus was under the microscope after spending $260,000 on hosting employers and other stakeholders at the Australian Open Tennis. In 2018 HostPlus invited 120 employers from across the country, with those employers accounting for about $4 billion in funds under management and 160,000 members. HostPlus representatives defended the spending, saying it's an important part of their retention strategy.
ANZ's Smart Choice sales under scrutiny
ANZ was questioned regarding the practice of branch staff selling superannuation products, with the Royal Commission suggesting that this practice was misleading to customers. The superannuation product suggestions were made at the end of what's known as an A-Z review of the customer's financial situation, goals and objectives. This may have been perceived by customers as personal advice, given what they'd just been through with their branch staff member.
AMP overcharged members $26 million in fees
AMP has been accused of overcharging millions in fees, with AMP's trustee only finding out about the no-fee no-service advice fees issue as part of the Royal Commission hearings earlier this year.
NAB holding out on ASIC to avoid media storm
National Australia Bank (NAB) knew in advance how much it was likely to pay in compensation for an overcharging scandal, but kept the information to itself to avoid negative media coverage. NAB executives were worried that NAB would be classified as 'the worst of the banks', which would have been true at that time.