Commonwealth Bank Response to Fairfax Media – Commonwealth Financial Planning
22 June 2013
We deeply regret that a small number of advisers provided poor advice to some customers who at that time had trusted and banked with us for years, if not decades. None of the advisers involved remain employed by Commonwealth Bank. We have no tolerance for behaviour that prejudices the financial wellbeing of our customers. With the benefit of hindsight, we know that a number of factors contributed to the development of a culture with respect to a small number of advisers.
Regardless of the motivations of some of the people who worked for us during that time, when the extent and seriousness of the issue was understood, we took decisive action to do the right thing for our customers and change the way we run our business to make sure this does not happen again.
We have worked hard over the past three years on improving the business. Today, our financial planning business is built on a rigorous compliance and risk management framework which includes prompt investigation of issues, the most comprehensive staff training program in the industry, changes in remuneration, more rigorous systems and processes, better document management and enforcement of higher standards by new management.
We have fostered an inclusive and engaged culture that is open and transparent. Our people are recognised and rewarded for improving the satisfaction of our customers – to do that, they have to understand customer needs and put in place a strategy that is in the customer’s best interests, and will help them achieve their financial goals.
This work reflects the requirements of the introduction of FOFA (Future of Financial Advice) reforms which will come into effect from 1 July 2013 and the wider desire of the Bank to protect and enhance the financial wellbeing of customers.
We acknowledge and agreed to ASICs enforceable undertaking and the regulator’s action that resulted in the banning of a number of Commonwealth Financial Planners.
It is unfortunate that a sales-based culture was not uncommon across the industry at that time. We do not condone misuse of corporate credit cards or inappropriate conduct. If we have evidence of this we will act.
We also fully support the intention of the FOFA requirements that will blanket the financial planning industry as a whole. This ensures that the advice customers receive from financial advisers is in their best interests.