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.
Senior Management fired = 0. FPA sanctions & bannings = 0. Minutes/Days Month ASIC temporary suspended CBA license = 0. Money received by the FPA and AFA from the CBA during this period = many many thousands in professional partner fees. Impact on all individual advisers everywhere = reputational damage, + annual exam X minimum education requirements.. Thanks CBA and FPA. A great outcome…not.
So where are the customer advocate lawyers who have been contracted by the CBA to act on the claims rejected by the CBA? Convenient the CBA could not find some missing documentation and then further dismissed these claims. The below comments raises some good points such as why did this culture exist and continues to exists today?
Press release slamming these outcomes from the ISA in 3…2…1….
CBA are open about there outcomes, the other 4 majors aren’t, even worse is the mid tier firms who wouldn’t know a bad adviser if it bit the on the you know where. head in the sand. take for example adviser banned by asic last week, left Westpac 5 years ago and been at a new dealer group since then, apparently he was clean as a whistle when he was there
CBA are open about the outcomes. What they have covered up though is the cause of poor advice in the organisation was driven by a culture of greed and ego by executives, many of whom are still in their roles. How about banning exec managers for having the foot on the throat?
Think you might find there are no execs left from those days
In some cases a customer who received poor advice didn’t differ a loss but how much potential gain have they lost out on? CBA is $6M under budgeted payouts – that means someone is going to get a bonus for saving the bank money. It’ll be hidden under a balanced scorecard but a bonus paid is a bonus paid.
The reality is that there will be possibly 1000’s more customers who haven’t lodged complaints or errors potential complaints not discovered by CBA because the amounts loss are too small to be obvious.
And I note that they bank only classes their advised customers as customers and not clients – that really does say something.
Finally, we all know that fish rot from the head. The head of CBA is the only fish head that defies nature.