CBA accepts new AFSL conditions on planning arms
The Australian Securities and Investments Commission (ASIC) has announced new conditions on two of the Commonwealth Bank of Australia's (CBA) financial planning arms following the failure of the banks' compensation program for clients.
ASIC took the action after CBA revealed that the original process developed to compensate customers of former Commonwealth Financial Planning Limited (CommFP) and Financial Wisdom Limited advisers was not applied consistently across all impacted customers of the businesses.
The new conditions were designed to ensure that the customers whose advice was reviewed by the AFS licensees under a past remediation program are:
- contacted by the relevant AFS licensee with an assessment of the advice they received and an offer of a further review, offered up to $5,000 to assist with obtaining their own financial or legal advice to assess the original review of their advice and any compensation offer, and given the ability to have their matter assessed by the Financial Ombudsman Scheme (FOS), with both AFS licensees agreeing to waive any limitation period or claim threshold that would normally apply to FOS matters.
ASIC Chairman Greg Medcraft said: "These conditions and their oversight by an ASIC-appointed expert provide confidence that relevant customers who received poor advice will be appropriately compensated, and that if the AFS licensees' processes for identifying deficient advice and affected customers were not adequate, that corrective measures are taken."
In a statement released this morning, CBA accepted the new conditions.
"The implementation of the varied licence conditions ensures all relevant customers are treated consistently," the bank said.
"Extending the offer for independent advice further underscores our commitment to openness and transparency in any remediation for customers. An independent expert appointed by ASIC will oversee compliance with the varied licence conditions.
"CommFP is now a significantly transformed business. It has undergone structural, cultural and management changes, with robust systems and processes in place for the supervision and monitoring of advisers. The supervision and monitoring framework has also been applied to Financial Wisdom.
"All customers who will be contacted in this process are also eligible to register for the Open Advice Review program which was announced by the Group on 3 July 2014."
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