Yesterday, ASIC released the findings of the first of three reports which the regulator has commissioned KordaMentha Forensic to undertake following ASIC’s decision to place conditions on the bank’s advice AFSLs last year.
“The report confirms the inconsistency and deficiencies of an original $52 million compensation scheme,” a statement from ASIC said.
“These shortcomings, which disadvantaged some customers, led to ASIC imposing new Australian financial services licence conditions on [Commonwealth Financial Planning (CFPL) and Financial Wisdom (FWL)] in 2014,” it said.
As a result, almost 3,000 former clients of CBA licensees Financial Wisdom and Commonwealth Financial Planning will be offered $5,000 and an independent review of advice provided.
KordaMentha Forensic is also due to release another two reports to ASIC. The second report will assess whether Commonwealth Financial Planning and Financial Wisdom had a reasonable basis for identifying the clients and advisers for the original compensation scheme.
“If KordaMentha Forensic finds that other clients or advisers should have been captured, CFPL and FWL will be required to rectify this,” ASIC said.
This is why people were calling for a Senate Inquiry. The CBA was basically left to its own devices to identify & rectify clients affected. They should not even be part of the identification/rectification process. They should just be writing the cheques at this stage and trying to turn their management team around so it does not happen again.