ASIC reports on compensation for financial advice misconduct
Six of the major banking and financial services institutions have paid or offered to pay a total of $3.15 billion in compensation to customers impacted by non-compliant financial advice, said ASIC.
In a public update, ASIC stated that on 31 December 2021, AMP, ANZ, CBA, Macquarie, NAB and Westpac had paid or offered to pay a total of $3.15 billion in compensation to customers who suffered loss or detriment due to fees for no service or non-compliant advice.
This includes the almost $1.3 billion paid or offered by the institutions between 1 July to 31 December 2021
The six institutions undertook review and remediation programs to compensate affected customers following two reviews by ASIC.
ASIC commenced one of the reviews 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.
The other review investigated how effectively the institutions supervised their financial advisers to identify and deal with “non-compliant advice”. ASIC explained that non-compliant advice is advice provided to a retail client by an adviser that does not comply with the relevant conduct obligations to give appropriate advice or to act in the best interests of the clients at the time the advice was given.
The bulk of compensation paid or offered related to fees for no service misconduct, with the six institutions offering to pay a total of $2.9 billion to customers impacted by fees for no service.
The remaining $246.8 million was offered or paid to customers related to non-compliant advice.
NAB has paid or offered to pay a total of $1.1 billion in compensation for fees for no service misconduct and $92.6 million for non-compliant advice, the largest amount of all six institutions.
