The Commonwealth Bank (CBA) is facing further financial advice compensation issues, undertaking to review all advice given to customers by five former advisers.
In an update released today, the Australian Securities and Investments Commission (ASIC) said that under additional licence conditions imposed on Commonwealth Financial Planning Ltd and Financial Wisdom Ltd, CBA would review all advice given to customers by the former representatives.
It said CBA would pay compensation where customers had suffered loss.
The ASIC announcement said that as at 10 January 2018, CBA had reported to ASIC that approximately $1.9 million of compensation was due to customers of the five advisers.
It said compensation was likely to increase as CBA reviewed further customer files.
The regulator said that the bank had recently written to over 3,500 customers of the five advisers informing them their advice was being reviewed.
“Following completed reviews CBA had issued assessment outcome letters to over 1,000 customers. CBA will continue to issue assessment outcome letters and compensation offers to affected customers between now and 31 March 2018,” the ASIC announcement said.
It said ASIC had appointed KordaMentha Forensic to complete a compliance review under the additional licence conditions with the result that it had been determined that CBA should review advice given by 16 potentially high-risk advisers, and has now reviewed and is satisfied with the processes that CBA used to:
- select samples of advice given by the 16 advisers for review
- review the appropriateness of advice given by the 16 advisers
- calculate whether any inappropriate advice given by the 16 advisers resulted in customers losing money of suffering loss, and
- conclude that all of the customers of five of the advisers should be reviewed in the compensation program and that no further review is required for 11 advisers.
ASIC said the current round of compensation was in addition to $4.97 million including interest already offered to customers of different advisers under the additional licence conditions compensation scheme, as reported on in KordaMentha's December 2016 compliance report.