The outlier appears to be Commonwealth Bank, which estimates it will be up for $105 million. Credit:Ken Irwin The report shows that the financial advice sector still has a long way to go to clean up its act. "AMP, ANZ, CBA and NAB have all identified systemic issues in relation to the charging of ongoing advice fees. Westpac has also identified a systemic issue but in relation to one adviser only," the report says. The revelations were brought about due to the introduction of future of financial advice (FOFA) legislation which demanded financial advisers had to write to customers every two years and let them know what they had done for them during that period, including fees, services and returns. If they were happy, the contract would continue, if not, they could part ways. It is this requirement that helped identify the fee-for-service failures. At the time that opt-in was being considered as part of FOFA, many institutions were screaming blue murder. They wanted to reintroduce commissions through general advice exemption, remove opt in and they didn't want fee disclosure statements. They also wanted to water down the best interests duty. They hired powerful lobby groups to argue it would be burdensome on customers and cost the industry a fortune in red tape. Thankfully, the crossbenchers and Opposition didn't buy the spin.

The banks now owe customers roughly $178 million. If they had, the chances are that many of those customers who are now being offered a refund with interest, would have kept paying for services they weren't getting. Put simply, in some cases such systemic failures might not have been addressed. The outlier appears to be Commonwealth Bank, which estimates it will be up for $105 million, followed by ANZ at $49 million, NAB at $16.9 million and Westpac yet to give an estimate. ASIC says it has commenced several enforcement investigations in relation to this conduct. The least worst offender is AMP, which has the biggest army of financial planners. It estimates it will have to repay $4.6 million to some of its customers.

CBA and ANZ say they self-identified and reported the problem to ASIC. CBA says some customers may not have received an annual review with their adviser, which was a key part of their ongoing service package. In a statement it says a similar issue was identified for some BW Financial Advice customers in the same year. "CFPL and BWFA have worked with an independent expert and ASIC to identify potentially affected customers and ensure the remediation approach is fair and consistent. It is expected approximately $105 million plus interest will be refunded to customers. In line with CBA's conservative approach, this amount was fully provided for in prior years." NAB also self reported and says it expects the average compensation amount per customer to be approximately $150, which is a lot less than CBA and ANZ's customers. This report should be a wake up call to the big four banks. ASIC says it has found no evidence of "fee-for-service failures" of a similar scale occurring in advice licensees outside of the big four banks and AMP. Between August 2013 and December 2015, ASIC received 22 significant breach notifications about fee-for-service "failures" from the banks and AMP. The fee rip-offs include a failure of the institution or adviser to provide advice despite the customer paying for it. They also include charging ongoing advice fees to customers who did not have an adviser allocated to them. This sometimes happened if the adviser had left. "Other reasons why the advice fee was not 'turned off' by the licensee, such as information technology (IT) or communications failures". Loading

This report raises questions about the integrity of the customer service satisfaction reports and the disconnect between the various scandals, the plummeting trust in the banks yet customer satisfaction is on the rise. ASIC says it has commenced several enforcement investigations in relation to the findings of this report. Let's hope this time it goes in hard. It is also time for the boards and the senior executives of these institutions to be held to account. As the old saying goes, a fish rots from the head down.