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AMP 'lied' to regulator about advice fees

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April 16, 2018

Commissioner Kenneth Hayne will hear evidence into dodgy financial advice handed out by banks.

Dodgy financial advice provided by the big banks and wealth planners to consumers will be scrutinised in detail when the banking royal commission returns.

The second round of the commission's public hearings is due to begin on Monday, with the focus on how banks and financial planners treat customers wanting financial advice and whether the investment information they have handed out breached any laws or community standards.

Commissioner Kenneth Hayne QC will hear evidence about consumers being charged fees for no service and receiving inappropriate advice, as well as details about improper conduct by financial advisors.

He will also examine whether current regulations and laws covering the financial planning sector are sufficient.

Representatives from the big four banks and financial services companies AMP and Centrepoint Alliance are expected to be grilled during the hearings, with evidence also expected from consumers who have suffered as a result of receiving poor advice.

Several case studies will be examined during the hearings.

The first involves the "fees for no service" charged to customers by AMP, the Commonwealth Bank, Commonwealth Financial Planning, Count Financial Planning, Charter Financial Planning and Hillross Financial Services.

ANZ earlier this month agreed to pay $3 million in compensation after failing to provide more than 10,000 customers of its Prime Access financial advice business with annual reviews of their investments despite having charged fees for them.

And on Friday CBA agreed to pay a $3 million dollar penalty the corporate watchdog found two of its financial planning arms had between 2007 and 2015 charged 31,500 customers for financial advice they didn't provide.

The financial planning arms, Commonwealth Financial Planning and BW Financial Advice, have so far made around $88 million in compensation payments.

ANZ's agreement to compensate customers followed a lengthy investigation launched in 2015 by the Australian Securities and Investments Commission into the failure by financial advisors to provide advice that customers had paid for.

The investigation was sparked by years of scandals involving the loss of millions of dollars by investors.

By the end of December 2017, AMP, ANZ, the Commonwealth Bank, National Australia Bank and Westpac had paid $51.4 million in compensation to customers who received poor financial advice.

The royal commission's hearings on the financial advice industry will run until April 27.

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