ANZ settlement implications for financial advisers

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Financial advisers can expect a compliance letter from the Commerce Commission to come their way and possibly private action by investors if they sold investment funds marketed by ING and ANZ which were frozen in March 2008.  

Tuesday, June 22nd 2010, 6:01PM 1 Comment

by Jenha White

The Commerce Commission says it has now concluded its investigation and it will not be taking any legal action against individual advisers, advisory services or other parties arising out of its investigation.

It does however expect to issue compliance advice letters to advisers describing their obligations under the Fair Trading Act.

The Commission considered that the main concerns raised have been dealt with through a $45 million settlement with ANZ over the promotion of ING's Diversified Yield and Regular Income Funds.

The regulator found the promotion of the degree of investment risk in the ING funds was "misleading" and that there was sufficient evidence to pursue proceedings against both ING and ANZ for breaching the Fair Trading Act. The regulator decided against this course of action, saying the settlement was the best outcome for investors in the funds.

 The settlement with ANZN covers the actions of individual ANZN advisers, so the Commission will not issue proceedings against these advisers.

The Commerce Commission says where any investor is concerned about the actions of his or her own non-ANZN adviser as to the nature of the advice he or she received, they can take their own private action through the Disputes Tribunal or financial services body if applicable.

"Although we note that the release signed by investors accepting the ING offer included all advisers and may prevent further legal action."

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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