ASIC has accepted an enforceable undertaking from Commonwealth Bank subsidiaries Commonwealth Financial Planning (CFPL) and BW Financial Advice (BWFA) over fees charged for advice that was not provided.
The EU comes as a result of an ASIC investigation that found clients of the two groups were charged for annual reviews in ongoing service packages that were not then provided.
“Both CFPL and BWFA have acknowledged in the EU that ASIC's concerns were reasonably held,” the regulator said in a statement.
Under the EU, CFPL and BWFA will make a community benefit payment of $3 million in total.
CFPL will also be required to “provide an attestation from senior management setting out the material changes” made to the business’ compliance structures, as well as further attestations regarding the business’ capacity to track its adherence to contractual obligations and taken reasonable steps to identify and remediate affected ongoing service clients.
“Our report into Fees For No Service in October 2016 identified the major financial institutions' systemic failures in this area, and called for fair compensation to be paid to customers who did not receive the advice reviews that they were promised and paid for,” ASIC deputy chair Peter Kell said.
“This enforceable undertaking follows on from the earlier enforceable undertaking accepted by ASIC in relation to ANZ's fees for no service conduct. These failures show that all too often the financial institutions prioritised revenue and fee generation over the delivery of advice and services paid for by their customers.”
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