Fairfax Media reported this week that Russell Phillips, a former assessor with CBA’s Open Advice Review program, told senators at a hearing on Wednesday that the bank is trying to lower the cost of the compensation.
“I feel very strongly that the scheme is not fair, it lacks integrity and apart from that it’s very opaque to outsiders,” Mr Phillips said, according to Fairfax.
However, in a statement, CBA refuted those claims.
“We reject allegations presented to the Senate inquiry today and stand by the independence and integrity of the Open Advice Review program,” the statement said.
“We welcome scrutiny of the program and have today invited all Committee members to view the workings of the program and meet the team and the assessors first hand.”
CBA’s compensation scheme, which closed to new registrations in July, was set up more than a year ago in response to victims who lost money via its financial planning arm.
ifa reported earlier this month that as of the end of August, CBA had reviewed more than 8,800 cases and compensated $488,815 to 19 clients.
The bank had offered $950,252 to 53 customers, but 11 had rejected the offer while 23 have not yet decided, according to a third update from Promontory Financial Group, which was appointed to oversee the program.
That update also stated CBA had been struggling to retrieve files from one of its dealer groups. As at the end of August, the bank is still trying to locate hard-copy files for about 50 per cent of the cases associated with the bank’s Financial Wisdom licence where a file is required.
Meanwhile, as a way to speed up the overall process, CBA added more than 100 people to its review team. Changes were made despite CBA chief executive Ian Narev saying in July that he was proud of the way the bank was responding through the Open Advice Review program.
What concerns me is the role that the compliance folk at Fin Wiz may have in all of this. How did they conduct audits of their advisers over the years if so many files were/are apparently missing? If a file couldn’t be located for an audit, did they just move on and audit another client file that could be found? There must be a (hopefully) very good reeason for the missing files. Just seems a bit strange to me.
I am not sure we can blame the bank wholly for files going missing – it would take a brave person to hide files deliberately especially in a corporate environment. I agree with having incentives to ensure that files are completed in a timely manner as I am not sure how else they could ensure these assessors worked through all the files – these assessors are on contract and unless they are incentivised to push through files – they could just drag the process as long as they wanted – Clients would then be complaining about CBA taking too long to deal with their complaint??
What we should be focussing on is ‘intent’ and I feel that CBA’s intent is to do the right thing – well certainly at CEO level
CBA can say what it likes, and it does. We all know that the bank is just dragging its compo process hoping that victims will die, go into nursing homes, lose their marbles, so the bank doesn’t have to pay their claims. CBA should not be able to get away with it but a gutless ASIC has ticked off on the hopeless compo scheme, so CBA knows it can do what it likes, when it likes, or do nothing at all.
How can you trust a business that can’t be trusted not to lose client files! I am relieved I am no longer with them!
Just waiting for the class action litigators to jump into the void and do what CBA and ASIC won’t – stand up for the clients.
…and this is why the whole Financial Advice Industry is struggling to improve it’s public perception and professionalism. Here we have the grossly conflicted ‘as slippery as an eel’ elephant in the room that has plainly done wrong to it’s customers by selling snake oil, left them high and dry, got caught holding the smoking gun, churned out the ‘bad apples’ rhetoric, lost their moral compass, and since are riding off into the sunset clause. Other People’s Money…