CBA pays $29m for poor advice

15 June 2017
| By Malavika |
image
image
expand image

The Commonwealth Bank (CBA) has paid over $29 million to over 2,100 cases as part of its Open Advice Review Program (OARP) for clients affected by poor advice received from Commonwealth Financial Planning or Financial Wisdom between 1 September 2003 and 1 July 2012.

CBA executive general manager, Leif Gamertsfelder said around 90 per cent of the cases had been finalised.

“We continue to make sure our dedicated team is available to assist customers or their independent customer advocate to answer any questions about the cases that are currently being finalised,” he said.

According to the Promontory Financial Group seventh and final report released today on the OARP, $29.11 million was paid to 2,186 cases. Of that amount, $22.98 million was paid to 1,641 cases. The bank said it would continue to finalise payments where offers had been made but not finalised.

A total of 8,654 cases were issued an assessment outcome, of which 7,515 had been finalised and closed after the customer had either accepted his/her assessment outcome or withdrawn from the program either because they had rejected the outcome or had not responded.

A total of 1,076 cases were found to have received poor or incorrectly implemented advice which resulted in financial loss for the customer, while 434 cases were charged incorrect fees, but the related advice was found to have been appropriate and did not cause financial loss to the customer.

Through the life of the program, the bank has retrieved an advice file for 8,618 of the 10,128 registered cases in the program, which left 842 cases where no advice file was retrieved. In these cases the bank had to apply alternative assessment processes to deal with those cases.

Where one critical advice document was available for review which suggested advice may have been provided on other occasions but no critical advice documents were available, bank assessors had to consider any information available on file to identify potential instances of advice, and then assess the customer’s attitude to risk known to the adviser to reach a conclusion.

The bank also used data analytics on customer transactions data to identify potential instances of advice.

A total of 22,797 customers expressed interest in the program, and 8,654 customers requested a review of their advice.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 2 weeks ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 5 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

23 hours 49 minutes ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 3 days ago