ASIC has announced six of Australia’s largest banking and financial services institutions have paid or offered to pay a total of $4.7 billion in compensation to customers who suffered loss or detriment because of fees for no service misconduct or non-compliant advice.
ASIC commenced 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 and how effectively the institutions supervised their financial advisers to identify and deal with “non-compliant advice”.
In an ASIC media statement on its website, the latter refers to 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.
“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 ASIC Commissioner Danielle Press.
“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,” Press said. “The subsequent programs have resulted in very significant remediation payments to affected consumers.”
The total figure is for funds paid or offered up to 31 December 2022. ASIC said it anticipated this would be the final update on compensation because most of these programs were substantially complete. ASIC said it would continue to monitor the implementation and finalisation of remaining programs.