Big four banks and AMP repay $60m, much more to come

Five financial institutions embroiled in a financial advice scandal have so far coughed up tens of millions of dollars in refunds and interest.

ASIC, the financial services regulator, announced that ANZ, Commonwealth Bank, NAB, Westpac and AMP have now repaid $60.7 million to more than 45,000 customers.

This was for “failing to provide general or personal financial advice to customers while charging them ongoing advice fees”.

These five institutions have estimated that they will eventually have to pay $204 million of compensation, plus interest, according to ASIC.

The table below shows the compensation payments and estimates that were reported to ASIC as of 21 April.

Fees for no service

The scale of the financial advice scandal first became apparent in October 2016, when ASIC released a report called Financial advice: Fees for no service.

At the time, ASIC estimated that the total compensation bill could reach $178 million, plus interest.

ASIC said there were two reasons customers didn’t get what they paid for:

• The customer did not have an adviser allocated to them, but was charged a fee for ongoing advice – usually by deduction from the customer’s investment products
• The adviser allocated to the customer failed to deliver on their obligation to provide the ongoing advice service and the licensee failed to ensure that the service was provided