Earlier this month, the Commonwealth Bank announced that it has spent $850 million on a combination of customer remediation, administering that remediation and investing in its advice business.
“If I take a step back from that, I think that we should have implemented FOFA in full,” CBA chief executive Matt Comyn told a parliamentary committee on Thursday, 11 October.
“I don’t think we went far enough in terms of removing things like conflicted remuneration. When we consider how that occurred, I think at times we focused on things like adviser viability, because the structural reform of any business, including the financial advice industry, is a complex one.
“Whilst there were a number of changes that occurred, with the benefit of where we’re sitting now, there are other things that we would have done differently as well.”
Commenting on the royal commission, Mr Comyn accepted that commissioner Kenneth Hayne “quite rightly” criticised CBA for failures of its systems and processes to ensure that it could demonstrate that every single one of its customers was only being charged for the services or products that they were being provided.
“Getting it right most of the time just simply isn’t good enough,” the CBA boss said.
“There certainly are instances of system failure on both sides, unfortunately. Systems are a critical element of a banking system and, as I said earlier, we need to ensure that there is complete accuracy and controls in place to ensure that customers, particularly, are not being overcharged or charged for fees and services that they did not provide.
“There is no escaping that, in the context of things like fees for service in the advice business, there simply wasn’t the requisite level of controls and systems and processes to ensure that we could demonstrate that customers were only charged for the services that they actually provided.”
Days before his appearance before the committee, CBA announced on the ASX its plans to improve outcomes for wealth management customers by rebating grandfathered commissioners for CFP customers.
This rebate will benefit around 50,000 customer accounts by approximately $20 million annually.
The bank has also announced plans to review any advice fees charged to deceased estates across all its advice licensees and refunding with interest any instances where unauthorised fees have been charged.
The new initiatives are the latest changes the bank has made after spending $580 million over the past six years to improve its advice business.
Commonwealth Bank has also spent about $270 million in compensation to customers who were provided with poor quality advice or charged fees for no service.
Still a full fee paying member of the Financial Planning Association (FPA) and the professional partner program. If I was CEO I would fine them, give hard working financial advisers buried in red tape a membership holiday and send a clear message to Treasury and the Future Labour Government that we are not the puppet masters of the Banks and we represent Australians and advisers.
The next time you see a FPA member ask them about these members..shameful.
actually whenever i see someone who is a member of the FPA, or associated with them, i just duck for cover as they are most probably an idiot.
Well put
spot on. paying $1,000 a year for 20 years and all I’ve got out of it is a Royal Commission, and the ability to witness a stat dec and FASEA.
If you got in 20 years ago you probably also got a CFP designation you didn’t study for and don’t deserve. Please do us all a favour and resign from the FPA right now.
In a similar vein, whenever I come across somebody whose self licensed, my first inclination is that they’re a pompous arse.
There are many advisers both aligned and unaligned who recognize the conflict of interest that the FPA has with product manufacturers and the poor outcomes this causes (both for themselves and their clients) when negotiating with Treasury, FASEA and the Government.
All you need to do is get elected and then you can stop your whining on this forum.
How ripped off does everyone associated with Dover feel after the the big four give ASIC the bird. Dover people are losing and have lost everything. ASIC is a disgrace.
I love the picture you paint – but it is so true.
so what. there is no recourse for advisers. they keep taking it. can do nothing, other than post on this site, which does nothing.
If this doesn’t show ASIC has been selective in their application of the rules, then what does?
we get it mate, everyone knows there is one rule for the big instos who have billions in their coffers to fight and then there is another rule for smaller people who might not have the said, billions.
but, what’s the point, no one seems to get to the next level of discourse.
given, we know all of the above, i.e. there is selective application of the rules depending on whom you might be. what do we, the rest of the advising community -who do not want to be a victim of the- same do?
a. do nothing
b. keep posting endlessly on this forum and hope to god, our turn doesn’t come
c. hope terry mcmaster beats them
d. keep under the radar and wish and hope for the best, as many have suggested
e. go on a hunger strike in front of parliament in Canberra (i personally like this as it is non violent form of protest and hasn’t been done before in Aus). it would also cure many portly advisers and help with their weight issue
has anyone got the gumption to start us off ?
Or option “f” – get your own licence and go fully independent.
ok ok, the last sentence offended me slightly but the truth is: I am portly. and a hunger strike would help my cholesterol, weight loss etc etc, so I am up for it, how long is the hunger strike?
it’s only 30 days isn’t it? if Jesus can do without for that long, so can I, yes I know i am not Jesus.
f) be a professional and stop being licensed under a predominately product owned licensee. and insist your professional association has no relationship with firms named and shamed in the royal commission and resign in protest..
Admission of guilt is one thing, don’t see any execs or managers being held to account- sacked is the only solution or give them to ACCC or ASIC publicly. At least ANZ showed some cred.
Funny, no one actually told me that implementing FOFA was optional…..
Only if you are a big bank or insurance company – then you can do what ever you like Melinda :lol::lol:
So CBA completely break the FOFA laws countless times, with full knowledge and criminal intent to break the FOFA laws as they didn’t want to lose Adviser profit servicing ongoing Fee for Service customers.
And what does ASIC do for years = NOTHING !!!!!!!!!
ASIC kindly agreed to the amount of the fines to be imposed – as determined by the Banks lawyers.
this would be funny if it weren’t true. this industry is a joke. do we really wonder why. so pathetic.