An external compliance expert has been engaged to ensure the Commonwealth Bank delivers on its promise to appropriately compensate customers impacted by poor advice.
In August 2014, the Australian Securities and Investments Commission (ASIC) announced it would appoint an independent firm to oversee the Commonwealth Bank’s compliance with its amended license conditions. The license conditions were imposed following an admission from CBA that it had failed to consistently apply compensation measures to victims of poor advice delivered by representatives of its Commonwealth Financial Planning (CFPL) and Financial Wisdom businesses (see: CBA Under Fire for Poor Advice Compensation).
KordaMentha Forensic has been given the monitoring role, following a competitive tender process. The firm will report regularly to ASIC on the results of its review of past activities by CFPL and Financial Wisdom to identify high-risk advisers and affected customers, and the advice businesses’ compliance with the new license conditions. Should any deficiencies be identified, CFPL and Financial Wisdom will be required to address these issues.
According to a statement from CBA, following the delivery of the first report by KordaMentha Forensic to ASIC, CFPL and Financial Wisdom will start contacting customers. Customers contacted will be given the choice to have their assessment reviewed, and the opportunity to seek independent advice via a qualified adviser (ie: a lawyer, accountant or licensed financial adviser), with fees up to $5,000 being met by CBA.
The bank added that customers who will be contacted as part of this process will also be eligible to participate in the CBA’s Open Advice Review program (see: CBA Apologises…).
The appointment of KordaMentha Forensic follows a determination by the Government that a Royal Commission into the CBA advice scandal is unnecessary (click here for more).
