High Court rules Westpac super switching campaign was “personal advice”

The High Court has dismissed Westpac’s appeal and ruled that it had provided “personal advice” under s 766B(3)(b) of the Corporations Act 2001 (and not simply “general advice”) in relation to a superannuation switching campaign: Westpac Securities Administration Limited & Anor v ASIC [2021] HCA 3 (High Court, Kiefel CJ, Bell, Gageler, Keane and Gordon JJ, 3 February 2021).


Westpac Securities Administration Limited (WSAL) and BT Funds Management Limited (BTFM) conducted a telephone sales campaign in 2014 to encourage existing customers to roll over their other super accounts into their Westpac-related accounts.

ASIC commenced civil penalty proceedings alleging that Westpac had crossed “an important and clear line” by employing a subtle sales technique of “social proofing” – creating an impression that customers should feel comfortable in accepting the rollover service without giving consideration to their personal circumstances.

The Full Federal Court held that “personal advice” had been given under s 766B(3)(b) of the Corporations Act 2001 because a reasonable person might expect the callers to have “considered” the objectives of the customers in making the recommendation to accept the rollover service: ASIC v Westpac Securities Administration Limited & Anor [2019] FCAFC 187. Consequently, as personal advice had been provided, the Westpac entities had also contravened the more onerous obligations on an adviser who provides personal advice (eg ss 946A, 961B and 961K).


In dismissing Westpac’s appeal, the High Court ruled that the financial product advice given by Westpac was personal advice under s 766B(3)(b). In so finding, the High Court rejected Westpac’s submission that the Full Court should have held that the reasonable person test in s 766B(3)(b) was not satisfied where a reasonable person would know that Westpac was not in a position to have considered the members’ stated objectives of “saving on fees” and “manageability” because Westpac did not have knowledge of the members’ personal circumstances that would be needed to give consideration to those objectives. That construction is contrary to the text and purpose of s 766B(3)(b) and unworkable, said Gordon J (with whom the other High Court judges agreed).

Gordon J said s 766B(3)(b) is concerned with the circumstances of the retail client including the form, content and context of the financial product advice. As O’Bryan J observed in the Full Court decision, Gordon J agreed that “where a provider of advice urges the recipient to follow a particular course of action, there is a greater likelihood that a reasonable person might expect the adviser to have considered the recipient’s personal circumstances.” Gordon J said this observation applies with particular force in the present case, where:

  • the course of action concerns a subject matter of significance to most members (being the consolidation of multiple super accounts);
  • there is a pre-existing relationship of dependence between the adviser and the member (that of trustee and beneficiary);
  • the adviser elicited the member’s objectives; and
  • once having been told them, the adviser confirmed those personal objectives through the use of social proofing as being common and relevant objectives.

Gordon J concluded that these circumstances would have conveyed to a reasonable person not only that those personal objectives were considered, but that no other matters needed to be taken into account and no other advice was required before the member made a decision to accept the recommendation and roll over their external super accounts.

Kiefel CJ, Bell, Gageler and Keane JJ also stated (at [13]) that:

“Each member might reasonably have expected that, given the nature of Westpac’s business and its experience and expertise in relation to financial matters like superannuation, Westpac had taken the objectives it had elicited from the member into account in recommending the roll-over service. That is consistent with the recommendation of the service being presented to each member as a “no brainer” having regard to the manifest benefits to each member to be expected from rolling over into a single Westpac account. Given that Westpac’s marketing was apt to create precisely that impression, it can hardly complain that it succeeded. Nor can it sensibly be suggested that the impression so created did not reasonably include an expectation on the part of the member that the recommendation was appropriate for him or her as an individual.”

ASIC’s response

In a media release, ASIC welcomed the High Court’s decision and said it clarifies the difference between general and personal advice for consumers and financial services providers. By clarifying the distinction between tailored, quality, personal advice in the customer’s interest, and general advice given via a sales campaign, Ms Press said the High Court’s judgment will provide clear guidance to those financial institutions that develop campaigns to sell financial products through direct approaches to retail clients. “As noted by the High Court, consumers’ decisions regarding superannuation accounts are ‘significant financial decision[s]’ and ASIC has a focus to lift standards in this area”, Ms Press said.

ASIC said the High Court (per Gordon J) has reinforced that s 766B(3) of the Corporations Act 2001, which outlines the meaning of general and personal advice, “is directed to the protection of the retail client” and clarified that “[…] the general advice warning must be assessed in light of all the circumstances. The general advice warning was given only once, at the beginning of the telephone conversation. Members were subsequently asked directly about their personal objectives. Members were not encouraged to seek personal advice before deciding whether to accept the rollover service.”

ASIC said the matter will now return to the Federal Court for a hearing on relief on a date to be advised. At that hearing, among other things, ASIC will seek orders for pecuniary penalties in relation to WSAL and BTFM’s conduct.

Subscribe toTax Insight

Discover best practice and keep up-to-date with insights on the latest industry trends.