Commonwealth FP completes enforceable undertaking

ASIC said in statement that it received from Commonwealth Financial Planning (CFPL):

• an attestation from CFPL signed by the group executive of retail banking services, Angus Sullivan; and
• a final independent expert report from Ernst & Young (EY).

In response, ASIC said it is satisfied with the attestation provided by CFPL and the final independent expert report provided by EY and compliance with the obligations under the CEU is now finalised, save for the payment of some remaining refunds due to clients, which is to be done by 30 September 2019.

It said CFPL has attested to the following matters as required under the CEU:

1. the material changes to CFPL’s systems, controls and processes that have been implemented in response to the fees for no service conduct;
2. that CFPL has taken reasonable steps to identify and remediate customers to whom CFPL did not provide annual reviews in the period from July 2015 to January 2018, on the basis that payment of additional refunds will be complete by the end of August 2019; and
3. that CFPL’s systems, processes and controls are now reasonably adequate to track and discharge CFPL’s contractual obligations to its ongoing service customers.

In January, CFPL was required under the CEU to immediately take all necessary steps to stop charging or receiving ongoing service fees, and not enter into any new ongoing service arrangements with customers. 

“CFPL had completed those necessary steps by April 2019 and it will also compensate those customers who were charged fees during the period February to April 2019, with refunds and reconciliations to be completed by 30 September 2019,” ASIC said.

“CFPL has also confirmed with ASIC that it does not intend to resume charging upfront ongoing service fees going forward, as it transitions to a new service model.”

ASIC said it will continue to monitor CFPL’s transition to its new service model.

Adrian Flores

Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.

You can contact him on [email protected].