Westpac is facing fines in the tens of millions of dollars after the High Court ruled it broke the law in offering advice to superannuation customers.
The Australian Securities and Investments Commission (ASIC) pursued the banking giant over a campaign in which it advised customers to roll all of their superannuation accounts into Westpac's investment management subsidiary, BT.
As a result of the campaign, the bank increased the funds under its management by almost $650 million between January 1, 2013 and September 16, 2016.
The advice, which was provided to customers by letter and phone, included the statement that "if you combine your super into one account, you could save on administration fees and enjoy the convenience of having all your super in one place".
The case centred on whether an ordinary person would have expected Westpac to have considered their personal financial circumstances before advising they take up the offer.
Under the law, the bank is required to consider those individual issues, if it offers "personal" advice.
"Was the advice given or directed to the member in circumstances where a reasonable person might expect that Westpac had considered one or more of the member's objectives, financial situation and needs?" Justice Michelle Gordon said, summarising the key issue.
Justice Gordon said the tone and tenor of the telephone calls had a repeated emphasis on helping customers in relation to superannuation, which meant customers could have expected their personal situation had been considered.
The rest of the court's bench agreed, and Westpac's appeal against an earlier ruling by the Federal Court was thrown out.
The penalty for the breach has not been decided, but it is expected to run into the tens of millions of dollars.
The penalty will likely be dwarfed by the fine of $1.3 billion issued against the bank last year over breaches of federal money laundering laws.
Westpac has also been ordered to pay costs in the case.
