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Banks to repay $178m for advice failures

AAP logoAAP 27/10/2016

The big four banks and AMP are likely to refund at least $178 million to more than 200,000 customers who did not receive financial advice for which they were charged.

The corporate regulator's update on its investigations into the financial advice industry, in particular a failure to provide advice to those being charged for the service, shows Commonwealth Bank faces the largest compensation bill.

CBA has so far paid almost $600,000 in compensation to customers who failed to receive the advice they paid for prior to 2014, and estimates it will pay another $105 million, plus interest, the Australian Securities and Investments Commission said.

ANZ's compensation is expected to total $49.7 million, while National Australia Bank will pay out $16.9 million, AMP $4.6 million and Westpac $1.2 million.

CBA said the transformation of its financial planning business has included significant improvements in its processes, supervision and training to prevent similar issues from occurring again.

"We apologise to our customers who did not receive their annual review," CBA group executive wealth management Annabel Spring said.

"We are working hard to complete our review of customers and have commenced contacting customers to refund fees, wherever our records do not show that an annual review was provided.

"We will continue to look across our business for areas where we may have made mistakes and put things right for customers."

CBA expects to pay its compensation by June 2017.

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