Big banks CBA, NAB, ANZ, Westpac, Macquarie and AMP pay billions to customers affected by financial advice scandal

Six of Australia’s financial giants have paid or offered $4.7 billion to compensate clients who suffered loss or disadvantage after being charged for no service or non-compliant advice.

In a statement on Friday, the Australian Securities and Investments Commission said institutions including AMP, ANZ, Commonwealth Bank, Macquarie, NAB and Westpac had implemented verification and remediation programs following two major ASIC reviews.

ASIC Commissioner Danielle Press said a project looking at compensation for misconduct related to financial advice has shed light on the fees clients pay and the services they should receive in return.

“Subsequent programs have resulted in very significant clean-up payments to impacted consumers,” Press said.

Of the total amount, approximately $1.1 billion was paid or offered by banking and financial services institutions in the six months ended December, with the remaining $4.7 billion paid or offered prior to that date.

The update – which ASIC expects to be the last – comes after eight years of the watchdog’s work addressing the failure of financial institutions and advisors to provide ongoing services to fee-paying customers.

In 2016, ASIC released a report that revealed systemic flaws in the advisory departments of AMP, ANZ, CBA, and NAB, as well as some of their product issuers. These included institutions’ failure to provide ongoing advisory services to clients who had paid to do so, advisors’ failure to provide those services, and product issuers’ failure to freeze advisory fees for clients who did not have a financial advisor.

Loading