In a statement released on Monday, ASIC said a total of $1.05 billion had been paid or offered in compensation to affected consumers as at 30 June 2020.
Around $296 million in payments had been offered or made by the institutions in the six months to June, ASIC said.
A breakdown of payments released by the regulator revealed NAB had topped the list in terms of dollar amounts paid or offered since remediation reviews began at the institutions in 2015.
The major bank had paid or offered over $368 million in compensation to more than 625,000 affected customers.
CBA had made over $167 million in payments or offers of payment to over 54,000 customers, while AMP had paid or offered more than $145 million.
With the refunds, they don’t go back into super, so there was a tax deduction that claimed by the fund for the advice fee which isn’t taken into account, then the clients get the full fees refunded into their bank accounts. So isn’t this early release of super?
mate I’ve been asking that all along. No one seems to care really.
Imagine how much money the union based super funds will be up for, when millions of fund members realise they’ve been paying endless intrafund fees (also for no service) since 2013, without providing informed consent, & no opt out provision. Nice little compensation amount in that one as well.
Won’t happen mate. Industry Funds are a protected species. Its ok for them to cross sunrise advice but God help the retail sector if they do it
So with no source of compensation for future wrongs – what’s the likelihood of a compulsory compensation scheme being introduced that every financial planner must contribute to? ASIC will require us to put up 250k or we can’t be licensed.
So with most of these instos gone – where does ASIC expect future compo payments will come from?
As an adviser who has seen a number of clients get refunds and yet the insto has not once requested my records to assess if service was provided. I can only guess at how much of that was warranted?
ASIC may well pat themselves on the back for getting money back for the little guy – but rest assured the unintended consequences will be felt for decades in terms of the public not getting advice, advice costs skyrocketing and ultimately more of the public reliant on the government for their financial well-being rather than themselves.
This is one of the biggest own goals I’ve ever witnessed.
The instos simply threw their hands in the air – decided its all too hard and the margins aren’t there – so they’ve bailed.
You think making more of the public reliant on Government was an unintended consequence?
Correct, I am sure it makes some ask for more too.
Add the same amount in finding out whom to pay and how much.
For the big four banks it was this response or losing further on their reputation. All of it from the trap laid by Bill Shorten’s FoFA legislation which is very difficult follow to the letter at all times while looking reasonable and innocuous.
Well they will just increase fees to get the money back.
Or cut dividends.
Members of the public do not know nor understand why they are receiving these payments.
All it does is throw the advice industry under the bus
In the case of StatePlus advisers have said to me “the clients never knew they were paying for advice in the first place” are lot were bundled in the ongoing management fee, and even when moved to an unbundled model they still didn’t know because of the lack of disclosure and advisers simply not verbally disclosing it. A case of get them in and get them out as fast as you can.
I would also add the Financial Planning Association (FPA) that represents these large insto’s and lobbies Treasury on their behalf have a lot of questions to answer. I hope the association that represents THEM, get’s asked some questions. Like why are these big insto’s paying them so so much money and what are they getting.
correct, Blame. treasury.
If the FPA is lobbying Treasury on behalf of large instos (as you claim), why is the FPA publicly advocating a new adviser registration system that would render large insto licensees obsolete?
Because the Insto’s have already mostly left the industry
if you tell yourself enough times that there wasn’t a problem you might even convince believe it one day….
Keep ignoring the facts and what do you have? FFNS does not actually allow for the inclusion of service.