Six major banks and financial services institutions in Australia paid or offered to pay almost $2 billion in compensation to customers who suffered loss or detriment due to fees for no-service misconduct or non-compliant advice.
As of June 30, 2021, AMP, ANZ, CBA, Macquarie, NAB, and Westpac had paid or offered to pay a total of $1.86 billion in compensation, including $620.9 million paid or offered by the institutions between January 01 and June 30, 2021.
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ASIC’s reviews looked into the extent of the institutions’ failure to deliver ongoing advice services to financial advice customers paying fees to receive these services. It also analysed how effectively institutions supervised their financial advisers to identify and address “non-compliant advice.”
In October 2016, ASIC released “Report 499 Financial advice: Fees for no service” (REP 499), describing systemic failures in the advice divisions of AMP, ANZ, CBA, and NAB and some of their product issuers – including the failure to ensure the provision of ongoing advice services to customers who paid fees to receive those services (fees for no service), the failure of advisers to provide those services, and the failure of product issuers to switch off advice fees of customers who did not have a financial adviser.
In March 2017, ASIC released its second report, “Report 515 Financial advice: Review of how large institutions oversee their advisers” (REP 515), outlining findings from its review of:
ASIC clarified that the institutions do not all hold consistent data for the number of individuals remediated. Specifically, the term “customers” broadly refers to individuals, couples, or all trustees of a self-managed superannuation fund.
In some cases, an institution may remediate a customer under more than one remediation program, so the institution may count the customer more than once.
