Banks pay $119.7m in compensation

AMP, ANZ, CBA, NAB and Westpac have together paid a total of $119.7 million (as at 30 June 2019) to customers who suffered loss or detriment because of non-compliant advice given by financial advisers.

The paid compensation covers a current total of 6,318 affected customers across the five banks, in light of review and remediation programs initiated by the Australian Securities and Investment Commission (ASIC) Report 515 Financial advice: Review of how large institutions oversee their advisers (REP 515).

The ASIC review commenced in July 2015 and focused on the financial advice provided by the institutions between 1 January 2009 and 30 June 2015, as well as monitoring the effectiveness of the big banks in supervising their financial advisers.

ASIC worked to investigate and report the processes and monitoring of Australian financial services licensees within these institutions, and the work being undertaken by the institutions to independently identify and compensate customers affected by non-compliant advice received during the review period.

According to the latest instalment of the ongoing remediation program provided by ASIC, NAB has paid the most compensation to date, with a combined total of $32,432,131 paid to 1,032 customers as a result of financial advice given by 81 advisers.

As at 30 June, ANZ has paid $26,712,367 to 1,357 customers due to advice given by 34 advisers, while Westpac has paid $26,494,266 to 1,173 customers as a result of 44 advisers. 

AMP has compensated the largest number of customers, with a total of 1,903 customers being paid $24,854,075, due to the advice of 32 financial advisers.

CBA has paid by far the least amount of compensation, with 21 advisers causing a total of $9,269,005 paid to 853 customers. 

The ASIC review into CBA under Report 515 is expected to be completed in November 2019, before any of the other four banks.

Notably, these figures do not include compensation amounts paid under other large-scale remediation programs conducted by ASIC, including fees-for-no-services issues and separate investigations into financial advice given by CBA subsidiaries Commonwealth Financial Planning Ltd and Financial Wisdom Ltd.

[Related: Five largest banks pay $51.4m in compensation]