Responding to questions on notice from the House economics committee, the bank said refunding former clients of Financial Wisdom, Pathways and Count advisers remained its “largest outstanding remediation program”.
The bank revealed that in order to calculate amounts owing to these customers, it had reconstructed data sets from July 2008 onwards to allow affected clients to be identified, as well as locating historical customer files and information that had not been centrally stored by the bank, “given the self-employed nature of the adviser network”.
CBA said it had also designed its own “end-to-end business solution and operating model” to be used in the assessment and refund process of the dealer groups’ former clients.
The bank noted that the majority of outstanding remediation fees owed to customers were from 2014 onwards, although some dated back as far as 2008.
“We acknowledge the time taken in completing this work and recognise the importance of refunding our customers as quickly as possible,” CBA said.
“CBA is committed to addressing past problems and remediating customers who have suffered loss where we have done the wrong thing.”
CBA said remediation of customers associated with its employed advisers in Commonwealth Financial Planning and Commonwealth Private had already been completed.
The comments come following the bank’s appearance at a hearing of the committee last month, in which CBA chief executive Matt Comyn conceded historical remediation of aligned advice clients had been “slower than we would have liked”.
“We’re very focused, given the scale of the dollars that are there that we want to refund those customers as quickly as possible,” Mr Comyn told the committee.
Labor MP and committee member Daniel Mulino was scathing of Mr Comyn’s remarks, saying that “every bank that comes before us talks about the fact that they want to get the money out the door”.
“There are a number of cases that have been under examination for years, and this is clearly a problem for a lot of people who are waiting upon that money,” Mr Mulino said.
According to ASIC figures also released through questions on notice to the committee, the big four banks had approximately $2.99 billion in customer remediations yet to pay, with $2.52 billion relating to fee-for-no-service remediations.
and this is the Regulators definition of a “service” and not consumers meaning. That means a RoA or SOA file recommending an investment switch…. and not a service such as visiting the client in hospital and lodging documents on their behalf to claim a disability pension.
Be buggered to know what was agreed to with the regulator however what they are doing is reimbursing advice fees even if there are detailed file notes on the system as well as cases where advice had been provided for free. On top of this, it is not the institution paying for this. They are getting the firm to reimburse the costs. Clients know what service has been provided and many clients have a good relationship with their advisor however the bank is forcing the reimbursement of fees and the clients are thinking what the hell is this for. It is a joke.
Yep, that’s because ASIC determined what customer service is…Is there any other industry in Australia where the Government has stepped in and said Customer Service means XYZ? Those FPA Membership fees have been well spent haven’t they.
If *anybody* but the big four banks would have to pay as much back as the banks did, they would probably be broke.
There is something fundamentally wrong with the banks being punished much more harshly than everybody else and the Labour Party comment is part of that wrongness.
punishment aside, neither Labor nor the general public realise that documentation of advice delivery was never held by licensees relating to self-employed advisers. Unless the licensee choses to write a cheque refunding everything back to 2008 then the process of sifting through documentation is going to be very slow.
The Labor comment re “a problem for a lot of people who are waiting upon that money” is misguided. Most people when they receive a refund had no clue it was coming – it is highly unlikely anyone (except Labor / ASIC) is awaiting a refund to be made.
For the CBA case, remember that this is on top of their other remediation plan for inappropriate advice post GFC… are there any fees left to refund?