Almost one-in-five Commonwealth Bank of Australia (CBA) advice clients who have received an assessment by the bank have either rejected or not responded to it, with one customer subsequently contacting the Financial Ombudsman Service (FOS).
The Promontory Financial Group’s third report on the Open Advice Review (OAR) program revealed that 686 assessments were issued by 31 August 2015, with the bank offering more than $950,000 in compensation for 53 cases.
Of those cases where compensation has been offered, the review found it was accepted in 21 cases, with almost $500,000 being paid to clients affected by poor advice given by advisers at the CBA’s Commonwealth Financial Planning and Financial Wisdom groups.
However, 126 customers had either rejected or not responded to the bank’s assessment of the advice they had received, half of whom had subsequently withdrawn from the review program.
“Of all the cases exited from the Program as at 31 August 2015, only one case had subsequently contacted the Financial Ombudsman Service (FOS) after being issued an assessment outcome,” the report said.
“Furthermore, as at 31 August 2015, no case had exited then subsequently pursued a claim against the bank through the courts.”
The report found that close to 28 per cent of clients who had had their advice reviewed had accepted the bank’s assessment without an offer of compensation, while 51 per cent were still reviewing the assessment.
While one per cent of cases were found to have received poor advice that did not result in any loss.
The Promontory group reported that 8,835 clients had registered with the OAR program for a review of their advice by 31 August, of which 1,285 were either in the process of being assessed or had been assessed.
