The Australian Securities and Investments Commission (ASIC) has appointed KordaMentha Forensic to identify high risk advisers within the Commonwealth Bank owned Commonwealth Financial Planning (CommFP) and Financial Wisdom and to review the licence conditions of both planning groups.
ASIC announced KordaMentha Forensic will review the past activities of CommFP and Financial Wisdom in a bid to identify high-risk advisers and affected customers and the level of compliance with the new licence conditions by the two planning businesses.
The two planning groups, owned by the Commonwealth Bank of Australia (CBA), had new Australian Financial Services Licence (AFSL) conditions imposed upon them after it was found that a scheme developed to compensate clients of former CommFP advisers was not applied consistently to all affected clients of the two planning businesses.
At the time the new conditions were imposed ASIC indicated it would also appoint an external compliance expert and stated it had chosen KordaMentha Forensic after conducting a competitive tender process.
KordaMentha Forensic will produce three reports for ASIC, which will in turn release the findings with CommFP and Financial Wisdom required to tackle any problems identified in the review.
After the first report has been released CBA stated it would contact more than 4000 clients of CommFP and Financial Wisdom informing them that "the advice they previously received was subject to an internal review" and that CommFP and Financial Wisdom "had identified that their adviser had provided poor advice to some customers in the past".
ASIC released the new licence conditions in August of this year and stated they were not part of the expansion of the CBA's remediation program for financial advice customers, announced in July 2014.
In making today's announcement ASIC did state that customers covered by the ASIC-supervised review may also have their claims assessed under CBA's Open Advice Review program in addition to the process in the AFS licence conditions.