How CBA closing FinWis cost one advice practice $33,000
As IOOF goes about the task of implementing its acquisition of MLC Wealth, financial advisers have raised issues about the distribution of revenue resulting from other events and license closures impacting financial advisers and financial advice practices.
An advice practice which was part of the Commonwealth Bank’s Financial Wisdom license is claiming to have been disadvantaged with respect to the distribution of revenues it was owed.
The practice, Lifestyle Financial Services, is claiming that the three months allowed by the Commonwealth Bank for the distribution of monies after the termination of the adviser agreement was simply not long enough.
Lifestyle chief executive, Gareth Hall said the issue was that after the three-month period, the Commonwealth Bank retained such revenue.
“We went to great efforts to ensure we had transferred all of our revenue accounts before the three-month cut-off,” Hall said. “Unfortunately, we missed one, which contained a large group salary continuance policy with a revenue payment to us of $33,071.23.”
“Once we became aware of this payment, we contacted Financial Wisdom but were told nothing could be done,” he said. “The policy issuer was contacted and asked to claw back the commission payment however Financial Wisdom closed their bank account on the 30th of June.”
“Subsequent conversations with remaining Financial Wisdom staff, now employed by the CBA, have been fruitless, with no solution apparently available.
“We have had a difficult year with all the additional work in transitioning to a new AFSL and the reduction in revenues we have experienced.” Hall said.
“I cannot understand why the CBA can’t pass on this revenue, which rightly belongs to us. How can they justify this decision, it just seems unethical.”
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
