Commonwealth Bank notes the release by ASIC of KordaMentha Forensic’s fourth report (Compliance Report Part 3) on the varied licence conditions regarding Commonwealth Financial Planning Limited (CFPL) and Financial Wisdom Limited (FWL).

In May 2014, CBA agreed with ASIC to varied licence conditions for CFPL and FWL in relation to steps those licensees took in mid-2012 to identify issues with advice provided prior to 2012.

CBA has agreed a process to review and remediate clients, and this process is overseen by ASIC’s independent expert, KordaMentha Forensic. The licensees have previously contacted more than 4,300 customers to offer independent reviews of the advice they had received.

The report issued today confirms that the licensees correctly identified that customers of five advisers should be included in a compensation program.

All customers have been contacted to advise them that CBA is conducting a review of their advice, and the vast majority of assessment outcomes will be issued to customers by the end of January 2018.  This is ahead of the schedule agreed with ASIC.

The licensees are offering customers who received advice the support of a qualified adviser (i.e. a lawyer, accountant or financial adviser) to seek independent advice in relation to the review, with fees up to $5,000 plus GST being reimbursed by the licensees.

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 plus GST 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. CFPL and FWL contacted more than 4,300 customers 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 files from 17 advisers to confirm whether the advice customers received before 2012 was appropriate. This was in addition to previous reviews of their advice that were completed prior to, and including, 2012.

In December 2016, KordaMentha Forensic released its third report on varied licence conditions, Compliance Report (Parts 1 & 2). This report confirmed that the licensees took appropriate action to contact more than 4,300 customers in 2015. Almost $5 million in compensation including interest was offered to these customers.