Major banks pay billions over misconduct and non-compliance

Major banks and financial services institutions in Australia have 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” misconduct or “non-compliant advice,” according to the Australian Securities and Investments Commission (ASIC).

The institutions – AMP, ANZ, CBA, Macquarie, NAB, and Westpac – undertook review and remediation programs to compensate the affected customers following two major ASIC reviews that delved 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; and
• how effectively the institutions supervised their financial advisers to identify and deal with “non-compliant advice,” that is, 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.

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Considering the reviews’ results, the six institutions have paid or offered to pay a total of $3.15 billion in compensation to the affected customers as of December 31, 2021, including almost $1.3 billion paid or offered between July 01 and December 31, 2021.

As of December 31, 2021, AMP paid or offered to pay $579,664,727 to 319,269 affected customers, ANZ paid or offered $123,965,993 to 40,137 affected customers, and CBA paid or offered $173,848,961 to 62,942 affected customers. Meanwhile Macquarie paid or offered to pay $4,628,000 to 1,105 affected customers, NAB paid or offered $1,127,275,888 to 754,519 affected customers, and Westpac paid or offered $894,957,011 to 111,284 affected customers. 

ASIC offered assurances that it has been monitoring the ongoing implementation of the institutions’ customer review and remediation programs since the report’s publication.