Bad advice in Australia costs banks $112 million in customer compensation
The big four Australian banks and AMP have paid a total A$119.7m in compensation to customers who lost out due to bad financial advice between 2009 and 2015, corporate regulator ASIC has revealed.
NAB is leading the charge, having repaid customers the most money with A$32.4m being repaid to 1032 customers over the period. NAB's compensation bill could have been even higher however. The regulator said it decided to exclude the contribution from one apparently incorrigible adviser whose conduct has cost clients more than $14 million alone.
ANZ is a close second having repaid A$26.7m to 1357 customers, Westpac has repaid A$26.5m to 1173 customers, AMP has repaid A$24.9m to 1093 customers and CBA has repaid A$9.3m to 853 customers.
ASIC expects further compensation to be paid as the institutions continue their review and remediation programs for non-compliant advice"
The figures do not include the fees-for-no-service scandals aired at the financial services royal commission - compensation for which had hit A$222.3m a year ago - nor the A$14.1m NAB has paid out for non compliant advice that started prior to 2009.
"ASIC expects further compensation to be paid as the institutions continue their review and remediation programs for non-compliant advice," the corporate regulator said.
According to the entities - which reported their progress to the corporate regulator - the equivalent of more than 810 full-time staff were working away at financial advice remediation relating to ASIC report 515, separate to any other advice review and remediation programs underway at the big banks.
NAB also identified the highest number of poor advisers with a total of 81 bad apples found within its ranks. Westpac notched up the second highest number of bad advisers with 44, ANZ found 34, AMP found 32 and CBA found 21.
NAB is also a laggard when it comes to its time frame for completion with the bank informing ASIC it does not expect to finish repaying customers for bad financial advice until December 2022.
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