The Commonwealth Bank (CBA) has offered to pay more than $4.8 million to customers affected by poor advice with the level of offered payments in 2016 nearly double that paid up to the end of 2015.
According to figures released by the Promontory Financial Group in its fifth report relating to the bank’s Open Advice Review program, CBA had offered $4.857 million in compensation to clients of Commonwealth Financial Planning and Financial Wisdom as at 30 April 2016.
However, $2.315 million was offered between 1 January and 30 April 2016, nearly double that offered since the program began on 23 January 2015 and well above that offered in the last four months of 2015, which totalled $1.592 million.
“…while CBA had made the 414 offers of compensation only 64% of the funds…had actually been paid to affected customers…”
Promontory said while CBA had made the 414 offers of compensation only 64% of the funds, or $3.123 million had actually been paid to affected customers with the difference due customers still reviewing the outcome of the review program and their compensation offer or the CBA doing the same where a counter assessment had been made by a customer.
The report stated that at the end of April, CBA had made assessment outcomes for 3038 registered cases in the program or 31% of the total of 9812 cases, and was in the process of completing assessments for a further 3081 cases (31%) with 2326 cases (24%) remaining to be assessed.
Nearly 1800 cases (14%) had exited the program after having accepted CBA’s assessment outcome or offer of compensation or had withdrawn from the program, after rejecting an assessment or not responding to an assessment outcome when supplied.
The report also stated that of the 3038 cases where assessment outcomes had been made 84%, or 2561 cases, were assessed as having appropriate advice and fees while only 11%, or 332 cases were found to have received poor advice, incorrectly implemented advice or incorrect charging of fees.
Responding to the report CBA stated the completed reviews confirmed that the large majority of customers who have had their advice assessed received appropriate advice and where poor advice was received the bank would compensate them accordingly.
It also stated the increase in offers and assessed cases reflected the program’s mature operating state and follow on from increased resourcing for the program made by the CBA during 2015.
