The Commonwealth Bank has launched a Open Advice Review program for its Commonwealth Financial Planning (CFP) and Financial Wisdom (FWL) businesses.
This is a new, far reaching program of review and remediation with independent oversight, to deliver fair and consistent outcomes for customers of CFP and FWL. This program demonstrates our commitment to make it right for our customers.
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At no cost to customers, the program will provide an assessment of the advice received, access to an independent customer advocate and an independent review panel. The program will be fully transparent to customers. To ensure we reach as many customers as possible there will be an extensive national advertising campaign.
The events considered by the Senate Committee occurred during the Global Financial Crisis, at a time when most people, even when well advised, were losing money on their investments. The matter of how to compensate affected customers was complicated. Our principle was to put customers back in the position they would have been had they received suitable advice.
We have already paid $52 million in compensation to more than 1,100 customers of specific advisers who were identified as having provided poor advice.
We have transformed our CFP and FWL businesses, so that today they can perform the critical role of providing quality and affordable financial advice to our customers. There have been changes in management, structure and culture. We have also invested in new systems, implemented new processes, enhanced adviser supervision and improved training.
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By GlobalDataOpen Advice Review program
The key features of the new program will be:
- Any customer who received advice from CFP and FWL between 1 September 2003 and 1 July 2012 and has concerns regarding that advice will be able to call a dedicated number and request an assessment of any advice received in the review period;
- The review of the past advice will be conducted by a specialist Commonwealth Bank team;
- In conducting a review, the specialist team will share the information it has available with the customer and will invite the customer to provide information that the customer has available;
- Once the review is complete the customer will receive an assessment and the offer of an independent customer advocate funded by the Commonwealth Bank;
- A customer who does not agree or is concerned with the assessment will have the option of a further review by an independent panel, determining whether compensation is payable and, if so, how much;
- The Commonwealth Bank will be bound by the outcome of the panel’s determination. However, the customer will not be bound and will still have the option of taking the matter to the Financial Ombudsman Service or pursuing a claim in respect of the matter; and
- We will also have the process overseen by an independent expert who will make their periodic reports public.
The comprehensive nature of this Open Advice Review program demonstrates our commitment to delivering a fair and consistent outcome for customers. This program is in addition to the licence conditions previously announced by the Commonwealth Bank and the Australian Securities and Investments Commission.
In order to improve public confidence in the broader financial planning industry, we will advocate for improved adviser education and training, transparency in adviser quality such as the public adviser register and measures that improve the financial literacy of customers.
The way in which we have transformed our CFP and FWL businesses over the past three years shows our commitment to ensuring that the best interests of our customers are always our first and foremost consideration. This transformation brings CFP and FWL in line with our other businesses at the Commonwealth Bank.
