‘We have failed our customers’: CBA responds to EU

Earlier today, Commonwealth Bank subsidiaries Commonwealth Financial Planning (CFPL) and BW Financial Advice (BWFA) entered into enforceable undertakings with the corporate regulator, which saw them pay a total $3 million community benefit payment.

In a statement to the ASX, the Commonwealth Bank said in 2014 it self-identified and reported concerns that clients of the two businesses did not receive the annual review of their finances which they had paid for as part of various ongoing service packages.

“CBA then worked with independent experts, Deloitte and EY, to develop and implement a comprehensive Advice Fee Refund program covering the period 2007 to 2015, which involved reviewing approximately 62,000 customer files and making payments of approximately $88 million (plus interest) to affected customers,” the statement said.

Commonwealth Bank chief executive Matt Comyn said the bank acknowledged that it had not met clients expectations.

“We recognise the fact that we have failed customers in our advice businesses over the past decade. These failures have resulted in a range of regulatory actions including [the] imposition of licence conditions and remediation programs,” Mr Comyn said.

“This is unacceptable and we owe our customers an apology for letting them down. Providing quality financial advice is critical for our customers.”

Mr Comyn added that the royal commission’s hearings on financial advice, which commence on Monday, 16 April, will address more instances were client expectations were not met.

“Next week, the royal commission will hear more about issues in financial advice where we have failed our customers and we need to listen and learn from what we hear,” Mr Comyn said.