CBA has released the final report of its compensation scheme, which shows the total amount the bank has paid to victims of poor financial advice as well as the challenges experienced throughout the review.
According to the final report from Promontory Financial Group, CBA has paid out $23 million to 1,641 cases of poor financial advice. This amount is despite the bank offering $29 million to victims.
The report states that 2,920 cases exited the program after not responding or rejecting the bank’s assessment outcome, while 62 lodged complaints with the Financial Ombudsman Service.
There were multiple challenges during the review, including scenarios where the bank could not produce sufficient documentation and evidence for particular cases, the report shows.
There were 10 cases that the independent overseer, Promontory, recognised as failing to adhere to the open advice review program’s documented processes and objectives.
This resulted in some customers receiving an incorrect assessment outcome or inaccurate offer of compensation and so offers of compensation were adjusted by the CBA following these findings.
Since commencing in July 2014, the compensation scheme has received 10,128 registrations from customers claiming to have received poor financial advice in the period between 1 September 2003 and 1 July 2012.
In 5,573 cases, CBA found no evidence of poor advice being provided or incorrect fees charged, the report stated. However, 1,076 cases were found to have involved poor advice that resulted in financial loss to the customer.
A further 542 cases were found to have involved poor advice that did not lead to financial loss to the customer and 434 cases were found to have involved incorrect charging of fees that did not cause financial loss to the customer, the report said. CBA is still assessing 936 cases.
ifa reported on one dispute in January where a lack of sufficient paperwork on the behalf of the CBA raised challenges for a former customer attempting to seek compensation for supposed poor advice.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 19 Oct 2018Life insurer fires 50, kills outbound sales businessBy James Mitchell
- 19 Oct 2018Strategic plan for AFCA releasedBy Eliot Hastie
- 18 Oct 2018Clique Paraplanning launches practice portalBy Reporter
- 18 Oct 2018Challenger announces new Netwealth dealBy James Mitchell
- 18 Oct 2018Aussies say royal commission won’t change their view of adviceBy James Mitchell
- 18 Oct 2018Hire younger advisers to get younger clients, paper suggestsBy Adrian Flores
- view all