View more on these topics

Bank’s “fee for no service” advice compensation costs pass half a billion

Leading Australian bank Westpac has today added another AUD$260m (£140m) to its coffers for compensating customers who received poor financial advice.

The sum comes from the bank’s first-half cash earnings for the 2018/19 financial year (July 2018-June 2019).

These extra funds push the total remediation bill to around AUD$650m (£350m) for the embattled bank, which last week announced 900 advice staff would be laid off in the sale of its struggling financial advice arm.

The cost is set to continue climbing with the bank still investigating other cases where customers may have been charged unfairly.

The bank states: “The additional provisions reflect an increase in the estimated proportion of instances where records of financial advice were insufficient for the purposes of the remediation.”

Westpac boss: Decision to exit advice was ‘not taken lightly’

Westpac chief executive Brian Hartzer says: “A priority is to deal with outstanding remediation issues and refund customers as quickly as possible.”

The provisions bring the estimated proportion of fees that will be refunded to 28 per cent.

Total fees received by Westpac’s salaried financial planners between 2008 and 2019 were just under AUD$1bn (£535m).

The investigations into the bank’s poor advice follow the closing of the 14-month Royal Commission into Banking, Superannuation and Financial Services in Australia, which has seen all four major banks caught up in a string of financial advice scandals.

The Sydney Morning Herald reports bottom lines at Westpac could take hits of up to AUD$580m (£311m) for H2 of the last financial year.

The exact figure will be outlined when Westpac hands down the results in May.


Ros Altmann

Ros Altmann: Without advice Lifetime Isa savers face clear risks

Since it was first proposed, it has been clear to many that the Lifetime Isa is unsafe to sell without advice. Significant dangers arise from the product’s complex design, absence of clear risk warnings, lack of suitability checks and asymmetry of information between customers and providers. The first evidence of such problems is appearing. Lisas […]


How to become a financial adviser: diplomas, degrees and workplaces

Information on how to become a financial adviser is sparse. Money Marketing speaks to advisers about what the requirements really are and how best to meet them. Speaking to financial advisers and planners today, each will have a unique and varied story about how they entered the profession. There are more than a handful of pathways […]

The future of dividends

Senior UK Equity Fund Managers Martin Cholwill, Richard Marwood and Henry Lowson discuss the future of dividends with Investment Week Editor Lawrence Gosling in the latest in a series of interviews focusing on UK Equities. During the video the managers look at the visibility and sustainability of dividends and how high dividend growth compares with […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm