In a statement, ASIC said the institutions had paid or offered a further $193.6 million in compensation to advice customers in the six months to December 2020.
NAB topped the list in terms of dollar amounts, having paid or offered over $437 million to around 636,000 clients since its remediation program began.
Westpac had the second highest compensation amount at $199.2 million, while CBA – which had completed its remediation program around poor advice in March 2020 – had paid or offered approximately $168 million.
AMP had the highest number of clients who had taken up the compensation offers, with 2,289 clients being paid compensation since the start of its remediation program. The institution had offered a total of $153.8 million as part of its compensation efforts.
More than 9,000 advice customers had been paid compensation across all six institutions.
StatePlus Financial Services has also been requried to remediate over $100m, doesn’t seem to get the same headline though.
And not one person from the big four, AMP or Macquarie charged or banned. Charging fees for no service is tantamount to theft. No more, no less. Yet, we regularly see wayward Advisers banned by ASIC for the same crime. The application of the law is determined by one criteria….the depth of your pockets.
Client declined review – refund the fees
Review completed one day outside of the 12 months – refund the fees
Client complained – refund the fees
Review completed but no RoA or SoA – refund the fees
If in any doubt – refund the fees
How many licensees could survive this or have the resource to pay like the majors?
It was not simply fee for no service, the majors just rolled over and it was cheaper to make the problem go away with money..
Also apply today standards to 10+ year ago, whos files would stand up to this?
[i][/i][i][/i]”How many licensees could survive this or have the resource to pay like the majors?”
I suspect the situation would be quite different for the non majors. It’s quite clear the majors are mostly paying fake remediation for situations where the client was never disadvantaged and no laws were broken. They are doing this to protect their brands and broader business interests in the face of ASIC intimidation and the media witch hunt extending from the RC. In many cases they are funding it from adviser clawbacks, as part of their one sided AR contracts. They don’t care about stealing from their advisers to appease ASIC and the media, because they’re trying to get rid of their advisers now anyway.
The smaller the licensee, the less likely they are to pay fake remediation for broader business purposes. They may pay some real remediation payments for genuine cases of client disadvantage, but these are likely to be isolated and minor.
If ASIC are going to continually release these updates, perhaps they could provide more information. Such as – How much of the compensation is actually for bad advice? How much is for situations where the adviser genuinely, was not not servicing the client? And how much is for technical issues, where the client continued to enjoy the service of their adviser for which they were satisfied, but the adviser did not put an adequate Record of Advice on file? I suspect,the vast majority of compensation is for the latter, which if true, would have to be the greatest scam ever inflicted on an industry by a regulator. If ASIC had prospectively provided guidance on the requirement to have annual ROA’s on file, this would never have happened. Or at least, no where near the degree that has occurred. So why isn’t ASIC being held to account for this? If one student fails, it is likely their fault, but if the whole class fails, the finger get’s pointed firmly at the teacher. If crime goes through the roof, the police and judiciary are scrutinised. Yet no-one seems to be questioning ASIC’s role in this and now they have been given the role of finding a solution to the red-tape they themselves have inflicted on us? I find this completely bizarre.
Sometimes you win big, so big that your win causes wholesale destruction.
ASIC really scored with the amount of remediation offered by the big banks who were leaving anyway as wealth management was 10% of profits and 50% of trouble for them. However, they scored so big that all compliance departments know that their business is unviable if ASIC gives them the same treatment. Hence the frantic risk minimisation that is going on.
The simplest way to destroy an industry is not to change the laws but to retrospectively change the expected record keeping standards. It will catch pretty much everybody.
With its big win, ASIC is now doubling down. Not only will we have 7-year lookbacks but eternal lookbacks under the new acting commissioner. In other words, virtually no licensee can operate with any certainty of their survival.
I have been offered $25000 as a “Go Away” settlement for a proven 5 year term where the advisor wrote to say they would not offer any advice in the future. In WRITING no less!
Can we please correct this to “…the four major banks, AMP and Macquarie have now offered more than $1.24 billion in compensation to customers as a result of their “couldn’t be bothered to actually check if clients had been serviced attitude….”