In a statement on Friday, the corporate regulator said the $4.7 billion in compensation paid to customers included $1.1 billion paid or offered by the institutions between 1 July and 31 December 2022.
“While this final update on remediation figures draws a line under this program of work — following eight 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 undertook the review and remediation programs to compensate affected customers as a result of two major Australian Securities and Investments Commission (ASIC) reviews.
ASIC conducted two reviews to investigate the failure of Australian financial institutions to provide ongoing advice services to customers who paid for them, as well as their effectiveness in supervising financial advisers to identify and address “non-compliant advice”.
According to the data provided, for fee for no service misconduct, AMP paid or offered $636.6 million in compensation to 340,573 customers, ANZ paid or offered $308.6 to 79,643 customers, while CBA compensated or offered $1.1 billion, NAB $1.4 billion, Westpac $970.3 million, and Macquarie $4.6 million.
For non-compliant advice, AMP paid or offered 2,844 customers $42.6 million, ANZ paid or offered $44.7 million to 2,123, while CBA paid or offered $9.4 million to 626 customers. NAB compensated or offered to compensate $114.8 million to 3,034 customers, and Westpac $58.8 million to 3,341 customers.
“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 said it expects this to be the last compensation update as most programs are complete but noted that it will continue to oversee the remaining ones.
And yet the government doesn’t want product providers to contribute to the compensation scheme of last resort.
Financial Advice represents less than 3% of AFCA complaints Product Providers OVER 50% these historic figures Product Providers – but Advisers have to fund the CSLOR and ASICs litigation even to non-registered fake advisers and influencers? Farsical theft, then the gaul to investigate why advice is “expensive”??? Am I stupid or is Australia a global joke of incompetence when it comes to Advice?
A great reason to get rid if the SOA, so the conflict of interest can return, with product providers giving advice.
So the big banks and AMP cost clients $4.7BILLION but Melissa Caddick gets all the headlines for her $30m fraud. Anyone else would be in jail for this but the big banks and AMP get to run a remediation program and keep their AFSL! The answer to the problems in financial planning are staring us in the face and yet we keep having review after review.
Yes, and many clients were getting charged the right fees , but they too were paid compensation. Bizarre system of events
Having personal experience of this I wonder how many were actually a case fee for no service versus a case of these firms just writing out a cheque and moving on. In my case it was “in the end we ran out of time and just paid out” …the flow on reputational damage (of being considered a Fee for no service adviser) done to this industry was immense. For me this industry is a death by a thousand cuts.
So going forward under QoAR, to prevent these issues for Super funds, they’ll be allowed to hide/bury the cost of advice among all members deep in some ongoing product fee.
If ASIC are serious then we need to see ALL Licensees go though the review process. Guaranteed many of the smaller and less governed groups have nowhere near the systems and capability of the 6 mentioned here but ASIC don’t seem to have the same energy and passion for client service with the smaller groups!
Makes complete sense then to let them give advice again!