“The conditions will require both businesses to undertake significant further work in relation to the compensation process for customers and will put in place independent monitoring of that work,” said an ASIC statement.
“ASIC is taking this action after CBA informed ASIC that the original process developed to compensate customers of two former CFPL advisers was not applied consistently across all impacted customers of the two businesses. This inconsistency disadvantaged some customers.”
ASIC chairman Greg Medcraft said the new conditions are in response to inconsistencies regarding the compensation offered to some former clients of CBA-aligned advisers.
“Measures were implemented in relation to customers of two former advisers within CFPL – Don Nguyen and Anthony Awkar,” Mr Medcraft said.
“However, they were not applied to customers of other former CFPL and FWL advisers, about whom there had been concerns.
In a perfect world ASIC would regulate standard information attached to every investment (the investment would not be viable without an ASIC rating) so that clear disclosure was made to every client re what they were getting into, where the client also had to sign – in blood – that they were aware of the potential consequences.
I am not saying for a second that CBA planners haven’t committed some grievous acts but I don’t know where we should draw the line re ‘caveat emptor’ and the level of responsibility each investor needs to take. Otherwise a lot of people will be compensated for what might be opportunistic claims. For some CBA clients exposure to High Growth strategies probably was appropriate.
ASIC won’t necessarily help the industry with this belated action, they might just wreck it by exposing the soft underbelly to the lawyers – making it impossible to advise re more aggressive strategies.
I left CBA 4 years ago because the culture was sell FUM at all costs (after less than 1 year there I knew it wasn’t a place for professional advisers, just salesmanship). While CBA talks these days of having changed, all senior management from my days are still there… I doubt their mentality has changed. True change requires new vision from new leadership.
There is one bit of silver lining to this cloud over the industry. Any small unaligned adviser brought to task unreasonably by ASIC (in comparison to the the little wrist slap for CFPL) will be able to present the CFPL example to the Administrative Appeals Tribunal as clear evidence for mitigation of any penalties.
Let’s not keep blaming ASIC when it’s the legislature that hamstrings ASIC (cut another $128 million from its budget) and indirectly tells ASIC who and what to target. Make no mistake – David Murray advises the Coalition on these things just as did people like Gil Hoskins more than a decade ago – and they (government) now listen only to the big end of town. The so called “red tape” that Labor has tried to introduce is now being rolled back after much clamouring from the Financial Services sector bosses. We get the regulation we deserve rather than which we need.
CBA rogue advisors are only scapegoats of the financial planning management. It is the culture and remuneration model that drives such behaviours. To truly address this issue, shame and imprisonment on the management could be good options because these thugs just move around the big 4 banks.
Good action, but again ASIC only took it because it was shamed into doing something after the exposure of the actions of these rogues on 4 Corners. It should have acted when complaints were first received.
The culture at CBA will never change until they change ALL their senior management in Financial Planning AND they break the relationship with the retail bank. Whilst the branches pick up big revenue off the back of advice, poor outcomes will be deliver. don’t believe the hype, it’s all about them maximising their share of your wallet!
What a joke, they are going to impose restrictions like What not flogging their own product, stop pushing sales driven advice. How about compensating the client and placing prison terms on both the advisors & the cba exec’s. Get real ASIC you have a whip made of Jelly. Unless you are small non aligned advisor trying to do the right thing by clients, & don’t have the deep pockets to Challenge the regulators. CBA are no more than thieves praying on a clients lack of knowledge