{"id":26219,"date":"2014-05-16T15:46:10","date_gmt":"2014-05-16T05:46:10","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=26219"},"modified":"2014-05-21T06:47:03","modified_gmt":"2014-05-20T20:47:03","slug":"cba-under-fire-for-poor-advice-compensation","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2014\/05\/16\/cba-under-fire-for-poor-advice-compensation\/","title":{"rendered":"CBA Under Fire for Poor Advice Compensation"},"content":{"rendered":"<p><span style=\"line-height: 1.5em\">The Australian Securities and Investments Commission (ASIC) has identified gaps in the process CBA has used to compensate the victims of poor financial advice.<\/span><\/p>\n<p><span style=\"line-height: 1.5em\"><!--more-->The regulator said it will impose license conditions on Commonwealth Financial Planning and Financial Wisdom, requiring both businesses to undertake significant further work in relation to the compensation process for customers.<\/span><\/p>\n<p>The measures were taken after CBA informed ASIC that the original process developed to compensate customers of two former CFP advisers, <strong>Don Nguyen<\/strong> and <strong>Anthony Awkar<\/strong>, was not applied consistently across all impacted customers, and that this inconsistency disadvantaged some customers.<\/p>\n<p>Listed among the process steps that were not applied consistently were:<\/p>\n<ul>\n<li>The upfront communication with affected customers of advisers where there were concerns about the quality of advice, advising them of those concerns, informing them that there would be a review of the advice previously provided to them and providing an opportunity to raise issues<\/li>\n<li>The offer of $5,000 to customers to obtain independent advice in order to help them assess whether the review of their advice and any compensation offer was adequate<\/li>\n<\/ul>\n<p>ASIC Chairman, <strong>Greg Medcraft<\/strong>, said: \u201cThe problem is not with the original compensation arrangements, but in the implementation. The compensation process originally developed was carefully designed to include a range of measures to protect the interests of customers involved. ASIC is extremely disappointed that not all of those measures were applied to all customers. We are now taking immediate action to remedy the inconsistent treatment.\u201d<\/p>\n<h6>ASIC is extremely disappointed that not all of those measures were applied to all customers<\/h6>\n<p>According to ASIC, more than 1,100 customers have received compensation to date, following a review of more than 7000 files. Over 4,000 customers will now be given an opportunity to have the question of compensation reopened.<\/p>\n<p>These corrective measures will be subject to oversight by an ASIC-appointed independent expert. The expert will also check to confirm that there were no other changes to the original methodology. The independent expert will report to ASIC and the results will be made public.<\/p>\n<p>\u201cI want to stress that we have not identified problems with the actual file reviews done in the compensation process nor with the amounts of compensation offered to customers. The problems in the process were with the communication,\u201d Mr Medcraft said.<\/p>\n<p>As a result of the admission, ASIC has also lodged a statement to correct the record of the Senate Inquiry into the regulator\u2019s handling of the CFP investigation. ASIC said that some of the information it provided to the Inquiry about the compensation process was inaccurate because it was based on the understanding of information from CFP. A report on the findings of the Inquiry is expected on 30 May 2014.<\/p>\n<p>The actions of CBA and its financial services businesses were recently the subject of an investigation by the ABC\u2019s Four Corner\u2019s program (see: <a href=\"https:\/\/riskinfo.com.au\/news\/2014\/05\/06\/cba-in-spotlight-over-churn-case\/\">CBA in Spotlight Over Churn Case<\/a>).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Australian Securities and Investments Commission (ASIC) has identified gaps in the process CBA has used to compensate the victims of poor financial advice.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,6],"tags":[],"class_list":["post-26219","post","type-post","status-publish","format-standard","category-compliance-regulation","category-dealer-groups"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/26219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=26219"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/26219\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=26219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=26219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=26219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}