It took the Commonwealth Bank longer than expected to switch off some of the fee mechanisms which led to fee for no service because of its use of platforms.
Just days before the Australian Securities and Investments Commission (ASIC) issued an update strongly criticising AMP, ANZ, the Commonwealth Bank, Macquarie, Westpac and National Australia Bank for taking too long to complete their fee for no service review, Commonwealth Bank chief executive, Matt Comyn signalled that it may be late March before the platforms ultimately switch off all the fee settings.
He said that fees had been stopped with respect to 97 per cent of the instances identified by the bank, but that it was likely to be at least another 10 days before it had achieved a 100 per cent outcome.
“The practical reason for the delay is that it takes time - and I provide this as an explanation rather than an excuse - to give those instructions to the individual platforms which then turn off the fees,” Comyn said.
“This is one of the reasons why we're reforming our advice business so that we're charging a customer for the service that's delivered only where there is evidence at the time of that delivery,” he said. “We will ask at that same time for an authorisation from the customer to deduct the cost of that service from their account.”
“At that point in time we'll provide that to the administration platform, and the funds will be deducted only at that point so we can ensure that we never find ourselves in the situation where customers are paying for a service on an ongoing basis and then trying to determine whether that service was provided faithfully and completely,” Comyn said.