The corporate regulator has released a report on "financial institutions' and advisers' systemic failures" to provide ongoing advice services to customers who have paid fees to receive those services.
The Financial advice: Fees for no service report is part of ASIC's Wealth Management Project, focusing on the conduct of Australia's largest financial advice firms, and identifies instances where clients have paid for ongoing advice service which they haven't received.
The advice arms of AMP, ANZ, the Commonwealth Bank, NAB, and Westpac are all included in the Wealth Management Project's review.
Services were not provided either because an adviser was not appointed to them or because the adviser that was appointed to them "failed to deliver on their obligation to provide the ongoing advice service and the licensee failed to ensure that the service was provided", the regulator said.
ASIC said up to $23.7 million in fee refunds and compensation has already either been paid, or been agreed to be paid, but said that approximately $154 million, plus interest, still needed to be paid, bringing the total compensation for failures to around $178 million plus interest.
"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," ASIC said.
The requirement to provide an annual fee disclosure statement to clients, as well as a client 'opt-in' for advice services every two years, are both expected to reduce the risk of fees being charged where services are not provided.
"Our report identifies the institutions' systemic failures in this area, which we are putting right by ensuring that customers are fairly compensated," said ASIC deputy chair Peter Kell.