Enquiry not needed in NZ: ANZ boss
ANZ New Zealand chief executive David Hisco sees no need for a Royal Commission in New Zealand.
Wednesday, May 2nd 2018, 6:00AM 
7 Comments
The big four banks and AMP have been called before Australia's Royal Commission for Misconduct in the Banking, Superannuation and Financial Services Industry.
Last week, it was revealed that ANZ did not act on a rogue financial planner who was using his clients' money to invest in property without authorisation.
The bank admitted that commercial interests trumped the interests of consumers.
Revelations from the inquiry led to the resignation of AMP's chief executive and board chairman.
But Hisco told Good Returns that the bank on this side of the Tasman faced a “different set of circumstances” to its parent company in Australia.
ANZ New Zealand has a separate board and a separate governance structure with regulators including the FMA, Commerce Commmission and Reserve Bank.
“They’re in our business actively,” Hisco said. “They can look at whatever they want to look at.
"Structurally we are different too."
He said one of the big differences was the New Zealand market did not have big superannuation schemes with lots of advisers chasing business.
“We don’t have advisers floating around the market place trying to get that."
Hisco said2% of ANZ’s New Zealand staff were advisers. Most of them worked in the private bank operations dealing with sophisticated investors.
He refers to the ombudsman schemes in New Zealand and says there is little evidence there is a problem in New Zealand like Australia. The Banking Ombudsman has said complaints received about banks are roughly distributed according to market share - ANZ is the biggest bank in the New Zealnad market.
“There’s noting in there that looks like anything like the sort of stuff that has happened in Australia," Hisco said.
When asked if there was a need for an inquiry he said: “No.
“I don’t feel there is a need because of those structural differences.”
ANZ Australia says its dealings with the Australian banking royal commission will cost it about A$50 million ($53.3m) this year.
The bank has reported it spent A$16m on legal and other costs associated with the Royal Commission in the first half of the year and flagged a $50m hit for the full year.
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Comments from our readers
These people - honestly.
Let's unpack Mr Hisco's comments a bit.
1. "We don't have advisers floating around trying to get superannuation business". Maybe not, but every member of your customer facing staff (which is a lot more than 2% of the workforce) have targets to sell Kiwisaver, and your business bankers are tasked with signing ANZ Kiwisaver 'preferred provider' agreements with all their business clients.
2. "Only 2% of our NZ staff are advisers". Which is roughly 180 advisers. If they're mainly in the Private Bank then they're mainly AFAs, in which case they make up close to 10% of all active AFAs in NZ. However, the Private Bank doesn't like to deal with sub-$1m portfolios, so these are probably assigned to RFAs using the cookie cutter approach Murray refers to above. Can ANZ comment on whether the RFAs are incentivised to use in-house products over 'best in class' external products?
3. "Complaints to the Ombudsman are low" - because most clients don't understand the serious potential conflicts of interest, and they don't understand they're being sold to, not 'advised'.
What's clear from the Australian experience is people have gone to the banks and large institutions because they trust them, and this trust has been abused for years to generate more profits.
In Australia there has essentially been a massive transfer of wealth from the clients to the large institutions. Let's at least look at whether the same thing is happening here.
The conduct coming out of the commission is chilling and unfortunately the road NZ seems to be destined to go down with the current proposed legislation.
Mr Hisco states that an enquiry was not necessary here. Would any of the bank CEO's in Australia have said one was required?
We now have The RBNZ and FMA saying an inquiry is not necessary here. The regulator in Australia didn't call for an investigation.
Quoting for Australian Media: "The banking royal commission was established in late December, after years of public pressure from whistleblowers, consumer groups, the Greens, Labor, and some Nationals MPs"
New Zealand has the most profitable banks in the world.
When is this farce going to be cleared up here as well?
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whilst ten of thousands of Kiwis were reeling from the 2009 GFC
and just yesterday ANZ announced profits of nearly $2 billion in NZ (annualised)
ANZ were behind the disastrous ING funds and their behaviour was nothing to admire
The Commerce Commission had to drag them kicking and screaming into a paltry 60% settlement
Mr Hisco, you can prove ANZ in NZ is honourable
Just back the call for a Royal Commission in NZ