On Thursday, ASIC reported as of 30 June 2021, AMP, ANZ, CBA, Macquarie, NAB and Westpac have paid a total of $1.86 billion in compensation, $620.9 million of which was paid between 1 January and 30 June.
The six institutions undertook the ASIC review that looked into the extent of failure to deliver ongoing advice services to customers who were paying fees for that service and how effectively the institutions supervised their advisers to identify and deal with “non-compliant advice”.
The largest figure paid or offered came from Westpac ($578,441,530) that was paid to 3,001 customers, while AMP paid or offered $230,418,976 to 2,961 customers.
Overall, 1,066,493 customers were paid or offered compensation.
Well one needs to keep in mind that most of this money was paid as it was simply easier to refund clients rather than audit the file correctly. What they are trying to pass off as misconduct was 100% compliant with the law and the rules of the time. ASIC arbitrarily inventing guidelines after the fact of what they consider a review doesn’t mean service wasn’t being provided to clients.
We had over 100 clients receive $1000’s of dollars back each under this, which have always been fully serviced clients and remain to be today, simply because the bank owned dealer group couldn’t be bothered with the audit cost which were either the same or more than the fees in question.
This whole thing is a sham. Great the banks gave our clients some money, but for ASIC to claim this as a win is BS.
Bank gave two clients of mine back their fees without any reference to whether services were provided or not. As you say – it was too hard. Just gone through a review with one of the two clients who now feels he shouldnt be paying for his review at all since his fees in the previous years were refunded…thanks CBA
These figures are grossly out of all proportion to the harm done.
Fees for no service – this is a latter day invention. This should have been considered an access fee.
As for the crazy idea of being paid interest on this money what rubbish.
This whole exercise has only benefited lawyers and the bureaucrats at ASIC.
Clients as a whole are far worse off.
If this was really anything more than a witch hunt the blow torch would have been applied to industry funds also.
Their deliberate delays in executing rollovers, refusal to accept authority forms from clients, misrepresentation of asset allocation, the continued charging of clients for services not received or utilized, the breach of privacy provisions surrounding client info used for other marketing activities.
What do we hear from consumer groups, lawyers, Hayne and politicians – silence.
1. Not one executive has been successfully prosecuted as a result of any of this
2. As a solution, Hayne/ASIC/Treasury have imposed ridiculous amounts of red tape
3. Adviser numbers are dropping
4. Advice is now unaffordable and unattainable for most people
5. Some smaller licensees were wound up to satisfy ASICs need for a public show of strength
6. The real problem (ie licensees forcing advisers to recommend their own in-house products even though they are not in the best interest of their clients) persists.
Well played all.
Exactly right.
Yet our resident village idiot, Tim Wilson MP, is spending all his time fighting against Industry Super funds (I don’t for one second claim they are clean) saying that their position against raiding super for housing is “the most disgraceful act”. Apparently the theft of over $2B from consumers is not disgraceful at all (according to Tim)…and so many support this fool when he is doing the most of anyone to damage the industry’s standing with the general public and perpetuate the “real problem” as pointed out above! Unbelievable.
ASIC knew for 10 years of this Fee for No Service problems and did bugger all to force the banks to fix it.
The big banks knew of these FFNS problems for 15 plus years and were more than happy to keep stealing customers money via these fee Rorts.
Has anyone from ASIC or the Big Banks been charged for this theft or negligence in doing there job ????
No they have not.
ASIC and the Big Banks just find every way possible to blame other Real Advisers and accept zero responsibility.
Disgusting ASIC and Big Banks at their worst.
Exactly – and it is these thieving institutions who have caused all of the pain Advisers are now going through. What are the government doing? Everything they can to support their donors and make the little guy pay. Absolute farce.
The $2 billion sounds like a lot but you need to add another $2 billion as typically 50% of remediation costs were spent on reviewing the files.
It was a ransom payment as the banks could not handle any more loss of reputation.
Then another $2B for the stuff that is still hidden or unknown (to everyone except the banks)
So Westpac clients received circa $192k each and AMP clients circa $78k each….must have been paying HUGE fees????
Dover got wound up, the big players just need to pay to play. Too big to fail? No problem!
Yet still they’re allowed to operate and haven’t been banned from the industry. Meanwhile an Adviser doesn’t dot an i in a letter to clients and they’re banned effectively for life. Seems fair.
We the mid, small and individual AFSL holders be held to the small scrutiny?
Fair dinkum!!
ASIC knows this and wants to gouge the non instos for their slush funds.
Its pretty obvious where the problems are and who should be paying.
ScoMo, Josh are you aware of more than COVID?
So true!
Yes, the Instos have paid but have the Insto Wealth Management heads paid, or at absolute minimum be held to account? It is well known in Industry circles and the broader advice community of 2 very high level Managers that were key architects of the FFNS – “if you want to keep your job then you better hit that monthly FUM target, so forget about service and reviews because my million dollar bonus is on the line”. Pre RC saw the unravelling, jumped ship of a major (with golden parachutes of hush money) only to land in their competitors establishment and go on to maintain their multi-m salaries. Wake up ASIC, stop pandering to your Gov mates and Corp Execs., and do your job across all tiers and levels, not just the battling small business owner. Everyday all we read is another adviser banned for life, business destroyed – what about the chiefs???????????
Yep Big Banks CEOs and managers can happily steel customers $$$ for 15 years.
ASIC can happily let it happen for 10 years and do nothing.
Both ASIC and the Big Banks are rightly roasted at the RC.
Anyone, CEOs, Managers get charged = NO
Anyone, CEOs, Managers get banned = NO.
Big banks and ASIC are totally corrupt.
So is there an intelligent and unbiased answer out there as to why planners are forking out for the negligence of the big guns. They can pay ASIC for their mistakes, we will pay for ours and someone else can pay for unlicenced people posing as planners
The advisers that profited from this can pay, as they are. Thank you very much
Gutless
I think you will find it’s the banks who profited by far the most. What they are paying back would be a small fraction of the money they stole.