Six of Australia’s largest banking and financial services institutions have paid or offered a total of $4.7 billion in compensation, as at 31 December 2022, to customers who suffered loss or detriment because of fees for no service misconduct or non-compliant advice.
This includes $1.1 billion paid or offered by the institutions between 1 July and 31 December 2022 (refer 22-231MR).
‘While this final update on remediation figures draws a line under this program of work – following 8 years of addressing financial institutions’ and advisers’ failure to provide ongoing services to fee paying customers – we will continue to monitor institutions’ processes to complete ongoing work in this area,’ said Commissioner Danielle Press.
AMP, ANZ, CBA, Macquarie, NAB and Westpac (the institutions) undertook the review and remediation programs to compensate affected customers [i] as a result of two major ASIC reviews (refer Background). ASIC commenced the reviews to look into:
the extent of failure by the institutions to deliver ongoing advice services to financial advice customers who were paying fees to receive those services. See Report 499 Financial advice: Fees for no service (REP 499), and
how effectively the institutions supervised their financial advisers to identify and deal with ‘non-compliant advice’ – i.e. personal advice provided to a retail client by an adviser who did not comply with the relevant conduct obligations in the Corporations Act, such as the obligations to give appropriate advice or to act in the best interests of the clients, at the time the advice was given. See Report 515 Financial advice: Review of how large institutions oversee their advisers (REP 515).
‘ASIC compensation for financial advice related misconduct project has shone a light on the advice fees that customers are paying and the services they should be receiving in return,’ said Commissioner Press. ‘The subsequent programs have resulted in very significant remediation payments to affected consumers.’
ASIC anticipates this will be the final update on compensation because most of these programs are substantially complete. ASIC will continue to monitor the implementation and finalisation of remaining programs. The table [ii] below provides a breakdown of the compensation payments made or offered by the institution as at 31 December 2022.
