The office of the Banking Ombudsman has investigated more than 60 complaints about investments made in these funds and has criticised the advice given.
The complaints investigated related to ANZ advisers as opposed to independent financial advisers as the ombudsman only has jurisdiction over the banks who are members of the ombudsman scheme.
ANZ advisers sold the funds as the bank has a 49% stake in a joint venture with ING.
Banking Ombudsman Liz Brown says she has found that in an (unspecified) number of 60-plus cases customers were recommended to invest “an inappropriately high proportion” of their savings into the DYF and RIF funds.
She also notes that advisers “failed to give an adequate explanation of the funds and the risks attached to them”.
She says that some advisers had recommended the funds even though they were “not suitable for the needs of individual customers.”
Brown says her office has had good co-operation from the bank in the majority of cases and 37 complaints have been resolved by “facilitation or conciliation” where the bank agreed to buy back part or all the investments, sometimes with other compensation.
In some of the other cases the bank accepted the ombudsman’s initial assessment in favour of the complainant.
“Only in one case was it necessary to issue a formal recommendation that the bank pay compensation to the customer.”
She says in some cases the advice was appropriate and proper explanations were given, and those cases were, therefore not upheld.
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