The Commonwealth Bank (CBA) has announced it will implement a new review and remediation program for customers impacted by poor advice delivered to them by advisers working for Commonwealth Financial Planning (CFPL) and Financial Wisdom (FWL).
The ‘Open Advice Review’ program is described as a far reaching review, with independent oversight, to deliver fair and consistent outcomes for customers of CFPL and FWL. It has been developed in direct response to the concerns raised by customers, and the Senate Economics References Committee’s report, released last week (see: CFP Scandal a Lesson for Entire Industry).
“This program demonstrates our commitment to make it right for our customers,” said CBA CEO, Ian Narev, who announced the program this morning.
The Open Advice Review will be delivered at no cost to customers, and provide an assessment of the advice they received. Any customer who received advice from CFPL or FWL between 1 September 2003 and 1 July 2012 will be able to request an assessment of any advice they received during the period. The assessment will be conducted by a specialist CBA team, who will share the information it has available with the customer. Once the assessment is complete, the customer will receive the offer of an independent customer advocate, funded by CBA. A customer who does not agree or is concerned with the assessment will have the option of a further review by an independent panel, determining whether compensations is payable, and if so, how much.
The CBA has committed that the program will be fully transparent, and will be supported with an extensive national advertising campaign, to ensure it reaches as many customers as possible.
I unreservedly apologise to all customers affected
Mr Narev also offered an unreserved apology to all customers affected, saying he was truly sorry for the financial loss and distress caused by some of CBA’s advisers.
“Trust goes to the heart of a relationship between a financial institution and its customers. At the centre of the matters which a recent Senate Committee reviewed, is the very disturbing fact that some people working for our Commonwealth Financial Planning (CFP) and Financial Wisdom (FWL) businesses breached that trust. They failed in their primary obligation – to act in the best interests of our customers.
“We know this is unacceptable and I unreservedly apologise to all customers affected,” Mr Narev said.
I hope CBA Financial Planning also apologises to all the honest advisers who act with integrity and alwasy put their clients first. Their unethical behaviour has had us all tarred with the same sticky brush and damaged all our reputations!
Sadly, but predictably, Mr Narev has chosen to lay blame on frontline staff rather than have he and his Senior Management colleagues take responsibility and be held accountable. As anyone who has worked on the frontline for one of the ‘Big Four’ well knows this isn’t a failure of a few ‘rogue planners’, its a failure of ‘bank culture. Driven by the mantra, ‘Maximise share of wallet’ (MSOW), frontline staff are placed under immense pressure to achieve sales targets (see article ‘CBA tellers driven to despair by hard sell’ SMH 01/07/14).
Unfortunately staff will now be forced to jump through more hoops in a ‘bottom-up review’, while Senior bank management quietly continue to apply pressure to MSOW to support their ever growing salary packages.
I totally agree with Meike, the whole industry is now tarnished and it will take a long time before the trust of the Australian people returns.
The whole issue was made a lot worse by the months of delay before any action was taken by ASIC!
Is it so that advisers forged clients approval on high risk high commission investments?
These advisers were authorised reps of Combank with PI insurance Yes?
Why aren’t the lawyers getting the clients losses and damages back from the PI insurers and Combank? Who needs ASIC and a Royal Commision if you have an army of ambulance chasing lawyers. I genuinley feel like I am missing something here, can anyone enlighten me?
Comments are closed.