Westpac to pay $87m to former financial advice customers

The bank will compensate former customers who weren’t alerted to opportunities from events like share buybacks and takeovers.

Westpac is compensating financial advice customers not given the chance to take advantage of corporate moves. Picture: Jono Searle

Westpac will pay out $87m to customers of its defunct financial advice businesses who were not told of opportunities like share buybacks, share purchase plans and takeovers.

On Friday the Australian Securities and Investments Commission (ASIC) said the failure to notify customers of these corporate actions involved customers of its BT Advice business, which was exited in 2019.

Between 2005 and 2019 approximately 328,000 corporate activity notifications were not sent to 32,000 customer accounts, the regulator said, meaning “customers may have missed out on various opportunities.”

Westpac first reported the issue to ASIC in 2019 and aims to compensate most of the affected customers by the end of 2021.

ASIC Commissioner Danielle Press said the regulator was pleased Westpac was proactive with its efforts to compensate customers.

“Compensating customers affected by misconduct is a very important part of licensees’ obligations to act fairly, honestly and efficiently,” she said.

“We are pleased to see that Westpac has taken action to remediate affected customers regardless of how much time has passed.”

“We encourage affected customers to engage with the communications from Westpac to understand how they were impacted and to seek further information from Westpac if required.”

A Westpac spokeswoman said the bank had established a website to help provide affected customers with information about the compensation scheme

“Westpac apologises to any client of its former advice business who may be impacted by this issue and there is a dedicated website with further information,” they said.

“A review was conducted by Westpac to identify clients between January 2005 and September 2019 who may not have received corporate actions notifications through their adviser and as a result missed potential opportunities from the shares they owned through their investment platform.

“Westpac reported this matter to ASIC in July 2019 and is remediating all impacted clients as appropriate.”

Westpac disclosed that it had provisioned for the corporate actions matter in April 2020.