Six of the largest ASX-listed companies have now dished up $1.05 billion of compensation to ripped-off financial advice customers.
AMP Limited (ASX: AMP), Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking GrpLtd (ASX: ANZ), and Macquarie Group Ltd (ASX: MQG) were forced to compensate financial advice clients for 2 violations.
An Australian Securities and Investments Commission investigation had previously found that customers were charged fees while not receiving anything in return.
For example, some cases saw the companies fail to switch off ongoing fees for clients that no longer had a financial adviser, or for customers that had died.
All 6 except for Macquarie were also found to have failed to identify “non-compliant advice”, such as not acting in the best interests of the client.
Both topics received widespread attention during the Royal Commission into the finance industry 2 years ago.
The corporate regulator revealed Monday the reparation bill had now topped the $1 billion mark, after the companies put up $295.9 million in the half-year to 30 June.
NAB topped the league table for fees-for-no-service misconduct, paying or offering more than $368 million to customers. The Commonwealth Bank was a distant second, with $167.1 million.
NAB also topped the charts for non-compliant advice, having to compensate to the tune of $52.2 million. ANZ wasn’t far behind, dishing up more than $39 million.
Fees-for-no-service compensation
| Company | Compensation paid or offered | Number of customers | Avg $ per customer |
| NAB | $368,075,052 | 626,863 | $587.17 |
| CBA | $167,131,529 | 54,826 | $3,048.40 |
| AMP | $145,719,911 | 199,425 | $730.70 |
| Westpac | $130,508,318 | 28,350 | $4,603.47 |
| ANZ | $66,653,885 | 26,461 | $2,518.95 |
| Macquarie | $3,970,000 | 983 | $4,038.66 |
| Total | $882,058,695 | 936,908 | $941.46 |
Source: Australian Securities and Investments Commission, table created by author
Non-compliant advice compensation
| Company | Compensation paid or offered | Number of customers | Avg $ per customer |
| NAB | $52,185,609 | 1,623 | $32,153.79 |
| ANZ | $39,182,569 | 1,920 | $20,407.59 |
| Westpac | $34,197,446 | 1,647 | $20,763.48 |
| AMP | $28,647,008 | 2,043 | $14,022.03 |
| CBA | $9,354,027 | 626 | $14,942.54 |
| Total | $163,566,659 | 7,859 | $20,812.66 |
Source: Australian Securities and Investments Commission, table created by author
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Motley Fool contributor Tony Yoo owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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