Australia regulator extracts another A$21.4m compensation from five largest Oz banks
An ongoing Australian Securities & Investments Commission investigation has seen in Australia’s five largest banking groups paying another A$21.4m (US$16.9m, £12.1m) in compensation to customers who suffered losses as a result of “non-compliant conduct by financial advisers”.
In December 2016, the five financial institutions paid some $30m “to approximately 1,347 affected customers who had suffered loss as a result of advice failings, by 97 high-risk advisers identified at that time”, ASIC said, bringing the total now paid by the banks as a result of the ASIC investigation to A$51.4m.
The compensation related to advice identified in an ASIC report last year, which had reviewed advice compliance at the five institutions – AMP, ANZ, the Commonwealth Bank of Australia (CBA), the National Australia Bank (NAB) and Westpac – between 1 January 2009 and 30 June 2015, according to a statement issued on Tuesday by the Sydney-based regulator. The report was issued as part of what ASIC calls its Advice Compliance Project.
ASIC said it expects further compensation to be paid, but added that “the amount of compensation and number of potentially affected customers is not known at this stage”.
“All institutions are reviewing the advice received by customers of their identified high-risk advisers,” the regulator said, in an update of its continuing oversight in connection with advice standards.
“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 noted that it had committed to providing regular reports on the progress of the work being done to reimburse those clients who had “suffered a loss or detriment” attributable to advice failings, and said it currently has ongoing investigation or surveillance activities “in relation to more than 50 individual advisers within the scope of the work” contained in last year’s report and that it will publicly report on the outcomes from these activities in due course.
As of the end of last month, ASIC said, it has publicly reported upon regulatory outcomes achieved in relation to 42 advisers who would have been covered by the remit of last year’s report.
To read and download that report, which is called Financial advice: Review of how large institutions oversee their advisers (or REP 515 for short), click here.
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