In an update to previous statements and following ASIC’s report today, Commonwealth Bank confirmed it has been working to identify and remediate customers since 2014 and has already commenced refunding customer fees. The refunds with interest will be completed by June 2017.
ASIC’s financial industry report today noted that in 2014 Commonwealth Financial Planning Limited (CFPL) self-identified and reported to ASIC that some customers may not have received an annual review with their adviser, which was the key part of their ongoing service package. A similar issue was identified for some BW Financial Advice (BWFA) customers in the same year.
CFPL and BWFA have worked with an independent expert and ASIC to identify potentially affected customers and ensure the remediation approach is fair and consistent. It is expected approximately $105 million plus interest will be refunded to customers. In line with CBA’s conservative approach, this amount was fully provided for in prior years.
Extensive work has been undertaken to identify customers that did not receive an annual review and to prevent similar issues from occurring in the future. As part of CFPL’s long-term business transformation, we have made significant improvements, including to our systems, processes, supervision and training. In addition, following the Future of Financial Advice reforms, customers also receive annual fee disclosure statements and new customers receive opt-in notices every two years to continue their ongoing service package.
Group Executive Wealth Management Annabel Spring said: “We apologise to our customers who did not receive their annual review. We are working hard to complete our review of customers and have commenced contacting customers to refund fees, wherever our records do not show that an annual review was provided.
“We will continue to look across our business for areas where we may have made mistakes and put things right for customers.”
