In a statement, Mr Narev said the new “far reaching program of review” will demonstrate the bank’s commitment to remediation and will have “no cost to customers”.
“Poor advice provided by some of our advisers between 2003 to 2012 caused financial loss and distress and I am truly sorry for that,” Mr Narev said. “We know this is unacceptable and I unreservedly apologise to all customers affected.”
The aim of the bank’s compensation program will be to “put customers back in the position they would have been had they received suitable advice” as well as addressing concerns raised during the Senate committee’s inquiry.
The program will include a dedicated hotline for former clients and opportunity for an assessment of any advice received during the relevant period – to be conducted by a “specialist Commonwealth Bank team and followed up by an audit by an “independent customer advocate” funded by the bank.
There will also be an additional panel for customers who are not satisfied by the results of an assessment, which will be binding on the bank.
Mr Narev reminded stakeholders that aggrieved clients will still have the option of taking the matter to the Financial Ombudsman Service.
Yep TD – everyone should get a licence or join a non-aligned group. That way we can have advice companies providing advice and have the banks go back to what they do best – paying dividends to shareholders and bonuses to execs
Good to see Narev has finally taken a leaf outr of QANTAS’ book and ‘fess up’ when something happens. That’s what we still love QANTAS even when things go horribly wrong – and they will, especially for a bank the size of CBA.
But you must also learn from the experience and fix the underlying cause – unrealistic sales targets and overly generous bonuses to sales people whose only job is to ‘sell’, but not to ‘sell compliantly’.
I would have liked to see some senior management heads roll over this scandal and bonuses they earned during 2003-12 handed back. The culture of this bank is all about making money for shareholders and top management, no matter how.
And CBA is not the only product producer pushing its financial planners to flog more product. Nothing Narev has said convinces me that the sales driven culture imposed on planners (and tellers) is about to change.
Anti Vi..are you suggesting every CBA planner could or should leave and enter the non aligned sector? My comment had nothing to do with issues of consolidation rather not continuing with BS generalised statements that seeks to unfairly tar everyone with the same brush.
Agree with Long Term Cynic, and note comment by TD and other overwhelming evidence. The management of CFP(CBA) pushed the product flogging with unrelenting zeal. If ASIC are serious about regulating this industry CFP(CBA) and any other major institution which has engaged in similar systemic long term non-compliance must lose their licences.
On the other hand, any small practitioner threatened by ASIC will of course be able to appeal to the AAT and site the CFP(CBA) case. The precedent in the process of now being established is “no matter how serious your transgressions have been, no problem, all you have to do is say sorry and promise to be good in future”.
This response by CBA is so typical; blame the adviser. What is still missing is a mea culpa on the oversight failure. The reason we have AFS Licensees is to provide oversight. CBA failed in its role of oversight, it failed to get rid of advisers it knew to be acting improperly, and it failed to be transparent to the regulator. Why haven’t the Responsible Managers and Directors been called to account?
It is a sad fact of human life that some people will go off the rails, including advisers. The reason for AFSL’s is to protect against those occasions. If, however, CBA’s oversight was only about protecting itself against claims, then surely that is a contributing failure. Even worse, if CBA ignored its responsibility to act against those those advisers in order to protect their own profits, then you really have to ask where the finger should be pointed?
The question that must terrify CBA is whether they deserve to keep their AFSL’s.
Gees, you’d have confidence in your matter (that involves dissatisfaction with CBA) being assessed by a “specialist Commonwealth Bank team”.
So you have been dudded by CBA Advice, now CBA ask that you trust CBA to review the dud CBA advice. Really?
TD – plenty of non-aligned options in the market, don’t believe the consolidation hype.
Anne, in fairness to the vast majority of CBA planners, this was a management issue. I got out of the CBA after 12 months in 2008 because of the unrelenting pressure from above to do things I new weren’t right. When you have a boss suggesting/telling you to do certain things to keep your job and for the boss to achieve his bonus its no surprise that these things happen. The poor planner is at the bottom of the food chain in an organisation like the CBA. Yes there are some shonks but the guys I know that are still there are horrified and distressed by what has taken place. The culture and the rules of engagement are set at levels high above the coal face. Go easy on the CBA planners as not everybody has the luxury of being able to leave and find an alternative source of employment.
CBA are only doing this because they hate the intense adverse media attention spotlight which has been shining brightly on them over the last few weeks…
This does come from the goodness of their hearts, I can assure you…
Recommending in-house products should be the exception, not the rule. Adviser KPIs based on in-house product selling should be outlawed, or force institutions to choose between providing advice or product, but not both. Its a hard pill to swallow but it will go a long way to removing the conflict. Then we only need to focus on good advice.
Well that took a long time. What is important is are there any undertakings that now and in the future CBA planners will do the right thing by clients and not think first of hitting their revenue targets and bonuses? And will CBA tellers stop harassing customers by pushing products at them while they are transacting their banking?