'That's not really how it works': AMP's royal commission shambles

Sean Gallup  Getty Images

Sean Gallup Getty Images

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

Nine-in-ten Australian financial advisers who provide advice to self-managed "super trusts" have failed to act in the best interests of their clients, the country's corporate regulator told the financial services royal commission on Monday.

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

Along with the Big Four banks, the advice group looked to be one of the biggest focuses of this stage of the hearings.

Several case studies will be examined during the hearings.

The inquiry heard AMP made a deliberate decision to continue charging fees to a group of "orphan" clients for three months when they went into a central pool, despite them receiving no advice services and legal advice that it was unlawful.

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.

Commonwealth Financial Planning and another CBA subsidiary BW Financial Advice are paying $88.6 million in compensation to 31,500 customers who did not receive an annual review as part of their financial advice service package.

AMP also admitted it made 10 false statements to the Australian Securities and Investments Commission and that its scheme to provide a retirement plan for external advisers was created to incentivise the sale of AMP's products over those of other banks.

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