The Australian Securities and Investments Commission (ASIC) has asked Commonwealth Bank (CBA) to pay up to $14m to victims of dodgy financial advice to have their cases independently reviewed.
ASIC released a report authored by KordaMentha Forensics into the CBA’s compensation schemes following the exposure of misconduct by its financial advisory arm Commonwealth Financial Planning Limited (CFPL), as well as the CBA-owned Financial Wisdom Limited (FWL).
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The regulator has identified failings and inconsistencies by the CBA in compensating and advising 4330 customers caught up in its financial planning scandal.
The report confirmed "the inconsistency and deficiencies of an original $52m compensation scheme" which ASIC had addressed by imposing additional licence conditions on CFPL and FWL in May and August of last year.
CBA will now contact approximately 2740 clients offering them up to $5000 to have their financial advice independently.
CFPL and FWL will also contact a further 1590 clients who were found not to have received advice. However if this was not the case and they had received advice they would also be offered the $5000 assistance.
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By GlobalDataCBA said it has acknowledged some of its financial advisers had failed to act in the interest of their clients. "We are committed to putting things right for those customers in an open and transparent manner," it said.
KordaMentha is set to release two more reports into the CBA financial planning scandal.
The second report will assess whether CFPL and FWL had a reasonable basis for identifying the clients and advisers for the original compensation scheme. While, the third report will provide an assessment of this work and CFPL and FWL’s compliance with the licence condition program.
CBA, in mid 2104, revealed that it had paid $52m in compensation to victims of high-risk advisers, the first case of repayments in a financial planning scandal that has also engulfed Macquarie Group, National Australia Bank and ANZ.
