Six of Australia's largest banking and financial services institutions have paid or offered a total of A$1.24 billion (US$961.5 million) in compensation, as at 31 December 2020, to customers who suffered loss or detriment because of fees for no service misconduct or non-compliant advice, according to the Australian Securities and Investments Commission (ASIC).
This is an additional $193.6 million in compensation payments or offers by the institutions from 1 July to 31 December 2020
AMP, ANZ, CBA, Macquarie, NAB and Westpac undertook the review and remediation programmes to compensate affected customers as a result of two major ASIC reviews. ASIC commenced the reviews in 2015 to look into:
- the extent of failure by the institutions to deliver ongoing advice services to financial advice customers who were paying fees to receive those services;
Most of the failures outlined in this report occurred before the commencement of the Future of Financial Advice (FOFA) reforms. The changes made by those reforms were a significant factor in the identification of the failures, and also substantially reduce the likelihood that the type of systemic failures described in this report will occur in the future.
- how effectively the institutions supervised their financial advisers to identify and deal with ‘non-compliant advice’ – i.e. personal advice provided to a retail client by an adviser who did not comply with the relevant conduct obligations in the Corporations Act, such as the obligations to give appropriate advice or to act in the best interests of the clients, at the time the advice was given.
The table below provides a breakdown of the compensation payments made or offered by the institution as at 31 December 2020:
|
Institution
|
Fees for no service misconduct
|
Non-compliant advice
|
| |
Compensation paid or offered
|
No of customers paid or offered compensation
|
Compensation
paid or offered
|
No of customers paid or offered compensation
|
|
AMP
|
153,782,308
|
207,044
|
33,886,311
|
2,289
|
|
ANZ
|
80,571,500
|
29,307
|
43,181,336
|
2,066
|
|
CBA
|
168,287,728
|
56,438
|
9,354,027
|
626
|
|
Macquarie
|
4,202,000
|
1,038
|
-
|
-
|
|
NAB
|
437,585,419
|
636,205
|
66,816,471
|
1,956
|
|
Westpac
|
199,216,156
|
44,590
|
42,343,152
|
2,211
|
|
Total
|
1,043,645,111
|
974,622
|
195,581,297
|
9,148
|
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