The Commonwealth Bank of Australia (CBA) has paid over $4.8 million in compensation to clients who received poor advice or were charged incorrect fees as part of the bank’s Open Advice Review Program.
In its fifth report, independent program expert, Promontory Financial Group, said that as at 30 April 2016, the bank had paid $4,857,974 for 414 cases in the program.
This was an increase of $2,315,214 from the $2,542,760 that was offered by the program to 31 December, 2015.
The compensation related to cases of poor financial advice that might have been provided to clients of Commonwealth Financial Planning and Financial Wisdom between 1 September, 2003 and 1 July, 2012.
The four-month period from 1 January to 30 April 2016 (current period) saw an increase in the number of cases that had been offered compensation for poor advice or advice that was erroneously implemented, with an additional 161 cases offered compensation. This brought the total number of cases to 332 as at 30 April.
This included 191 cases where the bank identified poor advice, which resulted in financial loss for clients, 46 cases where clients suffered financial loss due to incorrectly implemented advice, and 95 cases where clients were charged incorrect fees despite the provision of appropriate advice.
CBA had paid $3,123,551 to 209 cases as at 30 April.
“In addition to the 332 cases noted above, the Bank offered payments to 82 cases that were resolved following counter-assessment, with no change to the bank’s assessment that the advice was appropriate,” the report said.
In a statement, the CBA said: “The reviews completed to date have confirmed, with independent oversight, that the large majority of customers whose advice has been assessed received appropriate advice”.
“If customers received poor advice, Commonwealth Bank will apologise and where this has resulted in financial loss, compensate them,” the bank said.
There were also 466 new cases registered for the program during the current period, bringing the total number of registered cases to 9,812 as at 30 April, 2016. Of these, 2,084 cases began assessment during the current period while 1,101 cases completed assessment, with those clients receiving outcomes.
Of the 3,038 cases with assessment outcomes, 1,786 customers exited the program either by accepting the bank’s assessment outcome or compensation, or by withdrawing after rejecting or not responding to the bank’s outcome within 30 days.
One case was referred to the Independent Review Panel, with all members hearing the case in March.
