Via Banking Day:
A drastic pair of corrections from past disclosures – from NAB, mainly, and also Westpac – features in an update from ASIC on Friday on the state of play (and the compensation costs) from “fees for no advice” in the industry.
AMP, ANZ, Commonwealth Bank, National Australia Bank and Westpac “have so far repaid more than A$60 million of an expected $200 million-plus total in refunds and interest for failing to provide general or personal financial advice to customers while charging them ongoing advice fees,” the Australian Securities and Investments Commission said on Friday.
These institutions’ total compensation estimates for these advice delivery failures now stand at more than $204 million, plus interest, ASIC said. This is around nine times the estimate on payouts banks had paid, or agreed to be paid, (to more than 27,000 customers) spelled out by ASIC in October 2016.
ASIC’s update on Friday surveys the misdemeanours.
At ANZ, “the largest component of the bank’s compensation program relates to fees customers were charged for the Prime Access service, where ANZ could not find evidence of a statement of advice or record of advice for each annual review period.”
At CBA, for once, “there has been no substantial change in the bank’s compensation estimate, which remains at approximately $105 million, plus interest,” ASIC said. At Commonwealth Financial Planning the compensation estimate for results from a methodology where “the adviser failed to contact the client to provide an annual review.”
NAB over the last seven months “reported to ASIC the further erroneous deduction of adviser service fees for personal advice from more than 3000 customers.”
National Australia Bank’s remediation program is much heftier than previously understood.
“The estimate of customer accounts affected has increased from approximately 108,867 to 220,460” since ASIC’s late 2016 report, the regulator said.
Any “not us, not here” evasion of an industry wide epidemic has crumbled for Westpac.
ASIC said that as of late 2016 “Westpac had identified a systemic fees-for-no-service issue in relation to one adviser only, with compensation of $1.2 million paid in relation to those failures.”
There’s a new version of the facts.
ASIC said that “following further enquiries, Westpac subsequently clarified that it has paid further compensation of approximately $1.4 million to 161 customers of that adviser and 14 further advisers, in respect for fee-for-no-service failures in the period 1 July 2008 to 31 December 2015.”
ASIC said it will provide another public update by the end of 2017.
No royal commission needed. And another thing: no royal commission needed!
