The National Insurance Brokers Association (NIBA) is seeking legal opinion on repercussions from a Federal Court decision that found Westpac subsidiaries breached their licences by offering personal advice to customers.

The three justices in the full court decision say Westpac strayed beyond general advice during telephone calls aimed at encouraging customers to consolidate multiple superannuation funds into their BT accounts.

NIBA CEO Dallas Booth says the ruling reflects the particular circumstances of the Westpac case, but the decision is being referred for legal advice to examine any broader implications.

“It could raise questions about the general advice model that many advice firms operate under, whether it’s insurance broking firms or elsewhere,” he told insuranceNEWS.com.au.

The group will provide further information and background notes to members when the legal advice has been received and considered.

Chief Justice James Allsop says in the decision that consolidating superannuation funds is not a decision suitable for marketing or general advice as it requires attention to a customer’s personal circumstances and the features of multiple funds they may hold.

Whether advice is personal or general also includes consideration of the whole relational context. The judgement says the Westpac calls were made to existing customers and in a tone exhibiting a desire to help.

“Westpac attempted, assiduously, to get the customer to make a decision to move funds to BT without giving personal financial product advice as defined in the legislation. It failed,” Justice Allsop said.

Justices Jayne Jagot and Michael O’Bryan also ruled against Westpac and in favour of the appeal by the Australian Securities and Investments Commission (ASIC).

“While the customer would assume that Westpac was making the call to the customer self-interestedly, the customer would also assume that Westpac was making the call in the customer’s interest,” Justice Jagot said.

The parties are to agree on declarations and orders to be made. If they can’t agree, they will make submissions for the court to decide.

ASIC says it welcomes the court ruling, “which provides clarity and certainty concerning the difference between general and personal advice for consumers and financial services providers”.

Westpac is “carefully considering” the judgement.

The decision is available here.