The woman who ran BT Financial Group's advice remediation program has revealed what financial advisers need to know about remediation, and why some of the banks may make their remediation teams permanent.
Melissa Bogg was program director and head of operations for advice remediation at BT Financial Group from 2016 to 2018, after that she was transformational director and head of automation.
Now, Bogg has established a consulting firm called Lively Consulting and is convinced the entire financial advice industry could learn lessons from the big banks' remediation programs.
"Many companies are seeing the value of retaining their skilled remediation resources," Bogg told Financial Standard.
"I think this is in part due to the investment in training for often complex remediation specific work and the identification of more work in the pipeline as a result of the Royal Commission."
In Bogg's own experience, remediation took longer than expected. She puts the delays down to two things - data and people.
Gaining access to the data required to effectively remediate can be more complex than expected, especially when dealing with older cases, and communicating with customers who have had trust broken can prove difficult and time consuming.
"Whether you are operating a large business or a small one, you'll never to get it right all the time," Bogg cautioned.
"With many companies positioning the customer at the centre of their thinking, it makes perfect sense to retain a structure and experts in place to fix mistakes."
ASIC has said its tally for remediation provisioning for the industry is now well above $10 billion.
With remediation programs from the fallout of the Royal Commission still under way, a career move into remediation may be something for some financial advisers to consider.
NAB's remediation bill topped $2 billion last year, Commonwealth Bank's came in at $2.2 billion and ANZ's was just over $1 billion.
In May last year Westpac said it was likely to have to repay more than 30% of the ongoing advice service fees charged by authorised representatives of Magnitude and Securitor.
In its 2019 results, AMP estimated its remediation costs would hit $778 million.
Many of the big banks have boosted their remediation teams significantly in the last year, with ANZ's growing by 50% and the NAB team ballooning to 950 people.
Remediation work can actually be rewarding, Bogg said.
"Remediation advisers can make a real difference to clients' financial futures," she said.
She shared the story of one case where a customer received a payment that meant they could schedule much needed surgery.
"The client was beside themselves with relief and the adviser happy to put things right by the customer and win back trust in the industry," Bogg said.
"In my opinion there are three key traits for a good remediation adviser - they understand all aspects of the advice process, they are detail orientated and meticulous with recordkeeping, and they can easily engage and empathise with customers."