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CBA, ANZ enter enforceable undertaking over sale of pension products

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CBA, ANZ enter enforceable undertaking over sale of pension products

Commonwealth Bank of Australia and Australia & New Zealand Banking Group Ltd. both accepted court enforceable undertakings from Australia's corporate regulator over how the banks distribute pension products to customers.

The enforceable undertakings include an agreement to change the way the banks offer superannuation products and a community benefit payment of A$1.25 million each.

The Australian Securities and Investments Commission found that the banks' representatives offered pension products to customers following a fact-finding process about their overall banking arrangements. The practice may have led some staff to provide personal advice to customers. Branch staff are only mandated to offer general advice.

The practice may have also led some customers to regard the offer as personal advice.

In Australia, stricter consumer protection laws apply when customers receive personal advice about complex financial products, including pension products. People who provide personal advice are also required to meet stricter training standards.

CBA and ANZ accepted the enforceable undertaking and agreed to no longer discuss their superannuation products with customers during needs-based conversations with customers. ANZ will implement the change Aug. 18. CBA ended the sale of its superannuation product from its branches in October 2017.