ASIC reveals latest data on compensation payments for financial advice misconduct
Six of Australia’s largest banking and financial services institutions have paid or offered a total of $4.7 billion in compensation, as at 31 December 2022, to customers who suffered loss or detriment because of fees for no service misconduct or non-compliant advice.
In a statement on Friday, the corporate regulator said the $4.7 billion in compensation paid to customers included $1.1 billion paid or offered by the institutions between 1 July and 31 December 2022.
“While this final update on remediation figures draws a line under this program of work — following eight years of addressing financial institutions’ and advisers’ failure to provide ongoing services to fee-paying customers — we will continue to monitor institutions’ processes to complete ongoing work in this area," said commissioner Danielle Press.
AMP, ANZ, CBA, Macquarie, NAB, and Westpac undertook the review and remediation programs to compensate affected customers as a result of two major Australian Securities and Investments Commission (ASIC) reviews.
ASIC conducted two reviews to investigate the failure of Australian financial institutions to provide ongoing advice services to customers who paid for them, as well as their effectiveness in supervising financial advisers to identify and address “non-compliant advice”.
According to the data provided, for fee for no service misconduct, AMP paid or offered $636.6 million in compensation to 340,573 customers, ANZ paid or offered $308.6 to 79,643 customers, while CBA compensated or offered $1.1 billion, NAB $1.4 billion, Westpac $970.3 million, and Macquarie $4.6 million.
For non-compliant advice, AMP paid or offered 2,844 customers $42.6 million, ANZ paid or offered $44.7 million to 2,123, while CBA paid or offered $9.4 million to 626 customers. NAB compensated or offered to compensate $114.8 million to 3,034 customers, and Westpac $58.8 million to 3,341 customers.
“ASIC compensation for financial advice related misconduct project has shone a light on the advice fees that customers are paying and the services they should be receiving in return,” said commissioner Press. “The subsequent programs have resulted in very significant remediation payments to affected consumers.”
ASIC said it expects this to be the last compensation update as most programs are complete but noted that it will continue to oversee the remaining ones.