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Fees-for-no-service bill nears billion

Lachlan Maddock
— 1 minute read

Australia’s six largest financial institutions have now paid out hundreds of millions to customers impacted by financial advice-related misconduct, according to ASIC.

AMP, ANZ, CBA, NAB, Macquarie and Westpac have paid or offered a total of $749.7 million in compensation as at 31 December 2019 to customers who suffered loss or detriment because of non-compliant advice or fees-for-no-service misconduct, ASIC said in a release. 

NAB has paid or offered $163,862,768 compensation in total, while CBA coughed up $164,846,374. AMP came in third, shelling out $140,459,870. NAB compensated the most customers – 586,861.

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The remediation programs began as a result of two major ASIC reviews in 2015 that examined how effectively institutions supervised their financial advisers and the extent of failure by the institutions to deliver ongoing advice services to customers who were paying fees for no service, including “the failure of advisers to provide those services, and the failure of product issuers to switch off advice fees of customers who did not have a financial adviser.” 

The reviews covered the time between 1 January 2009 and 30 June 2015. 

Macquarie was excluded from the review because it offered ASIC an enforceable undertaking in 2013 wherein it undertook work that was “largely consistent” with the aims of ASIC’s review. 

Under the remediation program it later carried out as a result, Macquarie paid $24.7 million in compensation to 263 clients.

 

Fees-for-no-service bill nears billion
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