The Australian Securities and Investment Commission (ASIC) has found major financial institutions, including AMP, ANZ, NAB, Commonwealth Bank and Westpac, have been charging customers fees for ongoing financial advice they were never given.
Some customers paying for the service would receive consultation intermittently, while others weren't assigned a financial adviser altogether.
The tally of customers wrongly charged has now climbed to 300,000 in total, with the compensation also rising to $205m.
Commonwealth Bank will be paying for more than half at $106m. Following is ANZ at $52m and NAB's superannuation trustee, NULIS, at $35m.
ASIC described the breaches as "systemic" in its statement and claimed most
of the failures occurred prior to the Future of Financial Advice reforms, a
suite of legislative changes implemented in July 2013 addressing the
incentives paid to financial advisers.
"The changes made by those reforms were a significant factor in the
identification of the failures, and also substantially reduce the
likelihood that the type of systemic failures described in this report will
occur in the future," says the statement.
The startling findings are part of an ASIC investigation and follow the publication of the report Fee for no service in late 2016. The report originally found 200,000 people were impacted.
Similarly, ASIC recently released a report examining the mortgage broker
, which found commission structures incentivise brokers
to act in
the interest of banks – and not customers – by issuing loans that are
larger, riskier and take longer to pay off.