Tuesday, February 20,
2018 06.33AM / ASIC / Image Source is RAND Corporation
Australia's five largest banking and
financial services institutions have now paid a further $21.4 million in
compensation to customers who suffered loss or detriment as a result of non-compliant
conduct by financial advisers.
This compensation relates to advice
identified in the ASIC March 2017 Report
515 Financial advice:
Review of how large institutions
oversee their advisers (REP 515). REP 515 outlined ASIC's
observations and findings from its Advice Compliance Project. This additional
compensation brings the overall compensation total for matters covered by REP
515 to $51.4 million.
REP 515 reviewed advice compliance at
AMP, ANZ, CBA, NAB and Westpac. In addition to reviewing the effectiveness of
adviser oversight, the project reported on work being undertaken by these
institutions to identify and compensate customers affected by non-compliant
advice provided between 1 January 2009 and 30 June 2015.
As reported in REP
515, at 31 December 2016, approximately $30 million had been paid (or offered
to be paid) by the institutions to approximately 1,347 customers who had
suffered loss as a result of advice failings by 97 high risk advisers
identified at that time.
have since made an additional $21.4 million in payments to more than 1,687
customers. The table below updates the figures that were reported in REP 515
and is current to 31 December 2017. ASIC expects further compensation to be
paid, but the amount of compensation and number of potentially affected
customers is not known at this stage.
Compensation Payment Update
Note 1: The data in this table has been compiled
and interpreted by ASIC from the information received from the
institutions. It relates to the currently identified high-risk advisers
whose non-compliant conduct occurred between 1 January 2009 and 30 June
2015. It is current up to 31 December 2017 and differs from REP 515 in
that it only includes amounts actually paid to clients.
- Note 2: The compensation figures are rounded to
the nearest dollar.
- Note 3: An adviser or a customer can appear under
more than one compensation type.
Note 4: As part of its pilot work under the
review and remediation framework developed as part of this project, NAB
focused on an adviser whose non-compliant conduct commenced before 1
January 2009. NAB has paid $11,633,831 as compensation to affected
customers (as at 31 December 2017). These figures do not appear in this
Note 6: The figures recorded in this table do not
include the compensation amounts paid in relation to fees-for-no-service
issues, as noted in REP
499 and 17-438MR.
- Source: Institutions, ASIC
Remediation program progress update
All institutions are reviewing the
advice received by customers of their identified high risk advisers.
ASIC continues to oversee the
implementation and expert assurance of the remediation work undertaken by the
institutions. The institutions are also undertaking, and seeking expert
assurance of, work to identify any high-risk advisers not identified by their
previous monitoring and supervision processes.
ASIC committed to providing regular
reports on the progress of the remediation being made to customers who suffered
a loss or detriment.
In addition, ASIC has ongoing
investigation or surveillance activities in relation to more than 50 individual
advisers within the scope of the work in REP 515. ASIC will publicly report on
the outcomes from these activities as they progress.
As at 31 January 2018, ASIC has
publicly reported upon regulatory outcomes achieved in relation to 42 advisers
who fall within the scope of the work in REP 515.
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