The Commonwealth Bank has finalised additional advice license conditions with the Australian Securities and Investments Commission (ASIC), and appointed an independent expert to oversee its Open Advice Review compensation program.
Additional license conditions to improve consumer protections have been imposed by the regulator on CBA’s Commonwealth Financial Planning (CFPL) and Financial Wisdom advice businesses. The license conditions were applied following an admission from CBA that it had failed to consistently apply compensation measures to all the customers impacted by poor advice (see: CBA Under Fire for Poor Advice Compensation).
The conditions are designed to ensure that all customers whose advice was reviewed by the licensees under a past remediation program are:
- Contacted by the relevant licensee with an assessment of the advice they received and an offer of a further review
- Offered up to $5,000 to assist with obtaining their own financial or legal advice to assess the original review of their advice and any compensation offer, and
- Given the ability to have their matter assessed by the Financial Ombudsman Scheme (FOS), with both licensees agreeing to waive any limitation period or claim threshold that would normally apply to FOS matters
ASIC said it would appoint an external compliance expert to oversee the licensees’ compliance with the additional conditions. The expert will also review whether the steps taken by the licensees to identify both the advisers and the clients that were covered by the compensation program were reasonable. CFPL and Financial Wisdom will then be required to address any deficiencies identified by that review.
“These conditions and their oversight by an ASIC-appointed expert provide confidence that relevant customers who received poor advice will be appropriately compensated, and that if the AFS licensees’ processes for identifying deficient advice and affected customers were not adequate, that corrective measures are taken,” said ASIC Chairman, Greg Medcraft.
CFPL is now a significantly transformed business
A statement issued by CBA said the implementation of the varied licence conditions would ensure all customers were treated consistently, and that the offer of independent advice further underscored its commitment to ‘openness and transparency in any remediation for customers’.
‘CFPL is now a significantly transformed business. It has undergone structural, cultural and management changes, with robust systems and processes in place for the supervision and monitoring of advisers. The supervision and monitoring framework has also been applied to FWL,’ the CBA statement said.
CBA also announced the appointment of Promontory Financial Group as the independent expert which will monitor its Open Advice Review program.
Led by CEO of Promontory Financial Australasia, Dr Jeff Carmichael, Group CEO and Founder, Eugene Ludwig, and The Hon Mary Schapiro, Vice-Chair of Promontory’s Advisory Board, the Group will review the processes employed by CBA to compensate victims of inappropriate advice, provided by CFPL and Financial Wisdom representatives. Promontory Financial Group will also provide periodical reports to the public, to ensure the program remains transparent.
CBA CEO, Ian Narev, said the Open Advice Review program would give support and comfort to those who want their advice reviewed.
“Jeff Carmichael, Eugene Ludwig and Mary Shapiro are all recognised as international experts on structure, design and effectiveness of regulatory process. Their monitoring and periodic reporting is crucial in delivering a program that will provide comfort and assurance to customers and others that the program is delivering an efficient, fair and consistent outcome.
“The appointment of Promontory Financial Group, following the appointment of retired High Court Justice Ian Callinan AC as Chairman of the Independent Review Panel, is a further practical demonstration of our commitment to an independent process for our customers,” Mr Narev added.
Customers can register for the program by visiting www.commbank.com.au/openadvice.
What a load of rubbish, CBA is along with the incompetence of ASIC NOT doing the right thing AGAIN!
Here s a solution – suspend ALL CBA AFSL s until CBA comes clean on all there misleading and fraudulent activity, and compensates all those effected honestly and fairly – not offer some BS that minimises the losses to CBA.
ONce all customers have been fairly compensated – re issue restricted AFSL to CBA and all activity to be monitored by a board made up in the majority by Financial Advisers with appropriate qualifications.
Once CBA can show that they can operate openly and honestly then the restrictions should be lifted.
Thus would ensure a quick response and action from the bank and may help limit their incompetent advise going forward.
ASIC – sack the board and all the senior management and investigate their incompetence – why should they do a shoddy job and cost people millions and walk away to another high paying government position. Investigate and where possible prosecute each person!
“CFPL is now a significantly transformed business”
Yes because it was dragged and presured into doing so. Its a pity it did not change a long time ago before it mannaged to flick (let’s call it mud) all over the industry.
Comments are closed.