The Australian Securities and Investments Commission has today released KordaMentha Forensic’s second report on the varied licence conditions Commonwealth Bank agreed in May 2014. The licence conditions relate to steps Commonwealth Financial Planning Limited and Financial Wisdom Limited (the licensees) took in mid-2012 to identify issues with advice that was provided prior to 2012.
Commonwealth Bank Group Executive Wealth Management, Annabel Spring, said: “We are committed to doing the right thing for our customers. This report provides another layer of assurance and demonstrates how much we have done and continue to do to identify any past issues and put them right.”
The licensees will now review six customer 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.
“We will now work with ASIC and KordaMentha Forensic to complete the further reviews. If any customer received poor advice that resulted in financial loss, we apologise and will compensate them."
On 16 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. Around 4,300 customers were contacted over the period May-June 2015 following the publication of KordaMentha’s first report, the Comparison Report.
The Open Advice Review program is a separate program of review and remediation that was made available to all customers of CFPL and FWL between September 2003 and July 2012. More than 350,000 households were contacted to invite customers to register for the program. Around 8,000 customers requested a review of their advice and of these, more than 1,700 assessments have been completed.