The Commonwealth Bank (CBA) has offered compensation to 201 cases for poor or incorrectly implemented advice that resulted in financial loss in the four month period to 31 August as part of its Open Advice Review Program (OARP), bringing the total number to 438 since the program began.
In its sixth report on the program initiated by the CBA, Promontory Financial Group said the bank had offered $4,897,571 in compensation in the current period, which was more than double the $2,315,214 offered in the prior four month period to 30 April.
The program relates to the review of the financial advice received by customers of Commonwealth Financial Planning and Financial Wisdom between 1 September 2003 and 1 July 2012.
The bank said that the total amount of compensation that had been offered increased to $10,849,428 while the total amount of compensation paid stood at $7,779,987 as at 26 September.
“If customers received poor advice, we will apologise and where this has resulted in financial loss, we compensate them,” CBA said in a statement.
“Since the program began we have contacted more than 350,000 households to invite customers to register. Around 23,000 customers expressed interest and more than 8,600 requested a review of their advice. Of these, more than 6,000 assessments have been completed and we have offered approximately $11 million in compensation to customers [as at 26 September].”
As at 31 August, a total of $6,726,640 had been paid to 476 cases in the program. This involved:
The remaining amount related to where compensation was offered but not yet paid primarily where the bank’s assessment outcome was under review by the customer or by the bank in cases where a counter offer had been made by the customer. This involved:
- 470 cases where the customer had accepted the bank’s assessment outcome or offer of compensation;
- Five cases where the bank had issued an interim payment to the customer before the customer made a final decision regarding their acceptance of the bank’s assessment outcome; and
- One case where the customer withdrew from the program without accepting the bank’s final assessment outcome.
The total number of cases issued with an assessment outcome stood at 5,411 out of the 10,110 total registered cases. A further 2,322 cases were in the process of being assessed and 1,434 cases no longer required assessment due to the case having exited the program before being issued with an assessment outcome.
Out of the 5,411 cases that had been issued an outcome, 18 cases contacted the Financial Ombudsman Service (FOS) as at 31 August while eight of these cases referred to FOS during the current period.
The bank offered a fee refund to 160 customers for charging incorrect advice fees, while 214 cases were assessed as having received poor or incorrectly implemented advice that did not result in financial loss for the customer.
In the current period, close to 500 cases with no advice documentation were assessed by the bank using the program’s approach used for cases with limited or no advice documentation. As at 31 August, advice files had not been retrieved for 315 cases and an assessment remained pending.
