Missing files hinder CBA compensation scheme

According to the third report from Promontory Financial Group – which was appointed to oversee the Open Advice Review program – CBA 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.

“While the bank has made significant progress in retrieving the files of customers of [Commonwealth Financial Planning] in the program, the retrieval of files for customers of [Financial Wisdom (FWL)] remains a challenge,” the report said.

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“A particular challenge relates to customers in the program who had received advice from former FWL advisers. For these cases, the bank may not have the contact details of the former FWL adviser and, even when it does, requires the cooperation of the adviser to locate and make available the files.”

Given the difficulty, CBA has said it will introduce additional steps in order to locate and collect these files, which will accelerate the retrieving process.

Meanwhile, as a way to speed up the overall process, CBA has added more than 100 people to its review team, bringing the total number of full-time workers from 496 in April to 613 in August.

“The addition of extra resources within these streams allowed the bank to increase the volume of cases it assessed in the program at any one time,” the report said.

As of the end of August, CBA has 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.

Since April, an additional 478 new cases had reached an outcome by August. That is faster than the last four-month period, where only 208 cases had been assessed.

Changes to the program were made despite CBA chief executive Ian Narev saying in July that he was proud of the way CBA was responding through the Open Advice Review program.

After being questioned about the length of time it was taking to address claims of customers who received bad financial advice, Mr Narev conceded that the process was “slow.”

However, “you’ve got to accept in the short term you’ll wear some criticism for appearing slow, but in the long term you make sure you’re putting things right”, he said.

“What we weren’t doing [was] a good enough job listening to those voices saying actually the experience we had wasn’t the right experience and we have more to tell you,” he said.

CBA’s compensation scheme, which closed to new registrations in July, was set up a year ago in response to victims who lost money via its financial planning arm.

However, a CBA spokesperson told ifa at the time of the closure that customers may not see their claims resolved this year.

“We expect it will take all of this year and most of 2016 to complete the assessments,” the spokesperson said.