Commonwealth Financial Planning (CFPL) has received only a qualified “pass” mark from the independent expert report undertaken by Ernst & Young as part of its enforceable undertaking (EU) with the Australian Securities and Investments Commission (ASIC) around remediation arising out of its fee for no service breaches.
CFPL has succeeded in gaining an extension until 31 January, next year, to fulfil its obligations under the EU.
While the EY report, released by ASIC today, has found there was no evidence to suggest CFPL had not taken reasonable steps to remediate customers for some periods, it found that there had been a lower level of customer testing for other periods and that further work would be required.
It found, however, that CFPL was in the process of taking reasonable steps to identify and remediate those customers who should have received remediation for the period.
The EY report also noted that while CFPL had put in place adequate systems, processes and controls to meet its contractual obligations to customers paying ongoing fees, the firm needed to make further improvements to address a low level of control awareness within the business, a high prevalence of manual processes and controls and limitations on CFPLS’s ability to analyse and report information for tracking and reporting of compliance centrally.
The report said that CFPL had requested an extension of time for EY to produce its final report and for CFPL to provide its senior executive attestation as required under the EU to 31 January, next year.
It said this extension of time would allow the firm to undertake additional work required and to implement the recommendations made by EY.