Financial institutions outside the big four banks and AMP have been integrated into ASIC's fees for no service remediation programs, with total provisions likely to exceed $850 million.
Updating the financial services industry and consumers on its oversight of fees for no service remediation, ASIC said AMP, ANZ, CBA, NAB and Westpac have now paid or offered customers $222.3 million in refunds and interest for failing to provide advice while charging ongoing fees.
Other institutions and Australian financial services licensees (AFSLs) that have identified potential fee for no service failings include Bendigo Financial Planning, Police Financial Services (trading as BankVic), State Super Financial Services (trading as StatePlus), and Yellow Brick Road Wealth Management. These licensees have paid or offered $37.3 million in remediation to customers.
ASIC said it is also aware that five AFSLs or institutions have provisioned for future remediation payments. If all of these provisions are paid in full, fee for no service remediation may exceed $850 million, ASIC said.
The law enforcement agency said it will continue to supervise further reviews for entities subject to the fee for no services project.
Fees for no service have again been a hot topic at the fifth round of the Royal Commission this week. Focusing on the superannuation industry, Commissioner Kenneth Hayne has been quizzing former NAB and MLC executives about the charging of plan service fees to super members and whether these fees constituted fees for no service.
In May, ASIC chair James Shipton said there will be more consumer compensation to come over fees for no service. He also alluded to the regulator implementing new supervisory frameworks for the entire financial services sector - the result being this week's announcement of $70 million in Federal Government funding to introduce ASIC staff inside financial institutions.