The Commonwealth Bank Group (the Group) acknowledges the release of the final and dissenting reports from the Senate Economics References Committee (Senate Committee) inquiry into the performance of the Australian Securities and Investments Commission (ASIC).
With the release of these reports, we reiterate our apology for the past events that occurred in our Commonwealth Financial Planning (CFP) and Financial Wisdom (FWL) businesses. We deeply regret that some of our financial advisers did not provide quality advice to customers, some of whom had trusted and banked with us for decades. We have no tolerance for behaviour that prejudices the financial wellbeing of our customers.
Our primary focus has been putting our customers into the position they would have been in had they received appropriate advice. We acknowledge that for some customers this took time. In addition to looking after our customers we have been transforming the business to ensure these issues do not re-occur.
In late 2010, CFP commenced a customer remediation program, and in October 2011 CFP agreed to an Enforceable Undertaking (EU) with ASIC, which comprised an agreed Implementation Plan to transform the business and further extend the customer remediation program. Under the CFP EU an independent expert supervised, and then validated our compliance with the approved Plan in October 2013.
CFP is now a significantly transformed business. It has undergone structural, cultural and management changes, with the introduction of new robust systems and processes for the supervision and monitoring of advisers. The supervision and monitoring framework has also been applied to FWL.
We strongly refute Senator Bishop’s accusations. The Group takes very seriously the past events in CFP and FWL. The Group has worked openly and transparently with the Senate Committee and ASIC throughout the inquiry.
Furthermore, we note the dissenting report from Senator Bushby, particularly the context provided in section 1.36.
We continue to focus on doing the right thing for our customers. We have agreed with ASIC to accept licence conditions for CFP and FWL, to ensure that affected customers are treated consistently, including an offer of up to $5,000 to fund independent advice to affected customers who were part of the CFP EU and related CFP and FWL customer remediation programs.
We will now review the reports and the one recommendation that specifically relates to the Group, along with the remaining recommendations with respect to the financial planning industry.
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