The Commonwealth Bank continues to face challenges in sourcing critical documents from former Financial Wisdom Ltd (FWL) financial planners to enable it to assess whether clients are owed compensation under its Open Advice Review program (OARP).
The fourth report into the OARP, issued yesterday by independent consultant Promontory Financial Group, reveals that 1251 assessments were issued in the December quarter of 2015, up sharply from 478 in the previous quarter. It took the total number of advice cases reviewed and issued with an advice outcome to 1937, up from 686 at the end of September.
Of these, 810 cases had “exited the program”, with 587 accepting the bank’s assessment, 223 rejecting it and two of these cases going to the Financial Ombudsman Service (FOS). The remainder were still being considered by clients, or by the bank itself where clients had made a counter-assessment.
The Promontory report says that the bank has catalogued more than 970,000 hard-copy advice files, with files from more than 16,000 cases in the OARP now scanned and held in the review’s systems. The Commonwealth Bank has offered $2.89 million in compensation to affected clients, and actually paid $2 million.
However, the bank continues to face challenges in obtaining sufficient documentation from former Financial Wisdom advisers. It says the task of obtaining documentation “remains ongoing”.
“While the Bank made significant progress in collecting the files of customers in the program who were advised by current FWL advisers during the current period (with only two cases left remaining for retrieval), the retrieval of advice files for customers of former FWL advisers remains in progress,” the report says.
Additional challenges
It notes that “the retrieval of advice files for customers of former FWL advisers in the Program presents additional challenges such as obtaining the contact details and co-operation of each former FWL adviser”.
The report says that in many cases CBA is unable to retrieve what it describes as “critical advice documents” – which include statements of advice, records of advice and financial needs analyses.
The report says that in cases where a former FWL adviser has joined “a large, third-party advice entity” the task is simpler because the Commonwealth Bank can contact a single, centralised point to obtain files. However, where advisers have moved to smaller licensees, or obtained their own Australian Financial Services licence, the task is more complicated.
“The Bank expects to continue to undertake file retrievals for customers of former FWL advisers registered in the program throughout the first quarter of 2016”, the report says.
It says that about 1050 cases registered with the OARP “are left with no advice file that is currently available for assessment” and it is developing processes for dealing with these cases.
