Millions repaid for bad advice
HUNDREDS of thousands of Australians have received more than $380 million in compensation after suffering financial loss as a result of dodgy financial advice.
The financial services royal commission is examining cases where consumers paid ongoing fees but did not receive regular advice reviews, examples of inappropriate advice and misconduct including falsifying documents.
It heard the regulator is aware of $383.117 million being paid in compensation over the last decade to clients who had suffered financial loss as a result of financial advice or a failure to provide ongoing advice services.
As of February this year, about 306,000 customers of the four big banks and AMP have been paid $216.42 million as a result of fees paid for no service.
Counsel assisting the royal commission Rowena Orr, QC, said across the five entities, $218.94 million was expected to be paid in total with more than 310,000 customers affected.
Australian Securities and Investments Commission deputy chair Peter Kell said eight financial services entities had reported breaches to the regulator over fees for no service.
“I think it’s clear from our experience that the firms in question prioritised fee revenue from their advice businesses over the provision of services to the clients,” Mr Kell told the royal commission yesterday.
AAP
advisers, the vetting of advice and client remediation. This concerns the incorrect witnessing of beneficiary nomination forms by NAB financial advisers.
In late 2016, NAB identified a financial adviser who had forged two customers’ initials and asked another employee to falsely witness a beneficiary nomination form. By October 2017, it had identified 353 employees involved in incorrectly witnessing binding beneficiary nomination forms for superannuation funds. The incorrect witnessing potentially affected the validity of beneficiary nomination forms for about 2500 customers, the royal commission heard.
The case study centres on a financial adviser who engaged in a range of improper conduct, including falsifying documents, misappropriating customer funds and engaging in misleading and deceptive conduct in relation to customers.