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Media Release

Update on varied licence conditions – third report released

Update on KMF's third licence conditions report

ASIC today released KordaMentha Forensic’s third report on the varied licence conditions regarding Commonwealth Financial Planning Limited and Financial Wisdom Limited.

The Australian Securities and Investments Commission has today released KordaMentha Forensic’s third report on the varied licence conditions which commenced in August 2014. The licence conditions relate to steps Commonwealth Financial Planning Limited and Financial Wisdom Limited (the licensees) took in mid-2012 to identify any issues with advice that was provided prior to 2012.

In an update to previous statements, Commonwealth Bank said the report issued today confirms that the licensees took appropriate action to contact more than 4,300 customers in 2015. Approximately $4.9 million in compensation including interest was offered to 185 of these customers.

Commonwealth Bank Executive General Manager Advice Review program, Leif Gamertsfelder, said: “This report shows we have continued to deliver on our commitment to customers and demonstrates the thorough approach we have taken to identify any past issues and put things right for customers.” 


Note to editors:

Background on the varied licence conditions

In May 2014, Commonwealth Bank Group announced that it had agreed with ASIC to contact customers of CFPL and FWL to inform them the advice they had previously received was subject to an internal review as their adviser had provided poor advice to some customers in the past. The Group also agreed to offer these customers the support of a qualified adviser (i.e. a lawyer, accountant or financial adviser) to seek independent advice in relation to that review, with fees up to $5,000 being met by the Group. These conditions were finalised in August 2014 and KordaMentha Forensic was appointed by ASIC as the compliance expert for the agreed varied licence conditions and would prepare three reports. CFPL and FWL contacted more than 4,300 customers in 2015 following the publication of KordaMentha’s first report, the Comparison Report. 

In December 2015, KordaMentha Forensic released its second report, the Identification Report. The licensees agreed to review six files from 17 advisers to confirm whether the advice customers received before 2012 was appropriate. This is in addition to previous reviews of their advice that were completed prior to, and including, 2012. The licensees are continuing to work with ASIC and KordaMentha Forensic to complete the further reviews, the results of which will be published in a separate report when this process is completed.

Update on past and present remediation programs

As previously confirmed, approximately $65 million has been paid to customers through past and present remediation programs, including the $4.9 million (inclusive of interest) through the varied licence conditions and other compensation paid to customers through the Open Advice Review program.