Fees for no service and non-compliant advice hit $1.86bn
Six of Australia’s largest banking and financial services providers have either paid or offered $1.86 billion in compensation to customers who suffered loss because of misconduct or non-compliant advice, according to the corporate watchdog.
AMP, ANZ, Commonwealth Bank Macquarie, National Australia Bank, and Westpac undertook the review and remediation programs to compensate affected customers because of two major reviews by the Australian Securities and Investments Commission.
ASIC commenced the reviews to investigate the extent of failure by the institutions to deliver ongoing advice services to financial advice customers who were paying fees to receive those services. The regulator also examined how effectively the institutions supervised their financial advisers to identify and deal with ‘non-compliant advice’.
The issue of charging for advice that customers did not receive was uncovered by the Hayne royal commission. When the Hayne report was delivered in 2019, many advisors quit the industry because of heavier regulatory compliance rules.
Westpac has paid or offered to pay out the most compensation for fees-for-no-service misconduct since 2016, according to figures released by ASIC. The lender refunded $578.4 million to customers who paid for advice that they never received and $51.7 million for providing non-compliant advice.
NAB handed back $556.1 million for misconduct and $80 million for non-compliant advice and for CBA those figures were $169.3 million and $9.35 million. The last of the big four banks, ANZ refunded $96.9 million for charging fees-for-no-service and $44.70 million for non-compliant advice.