Retail clients impacted by CommPrivate move to wholesale only offering

The Commonwealth Bank has made changes to the advisory offering within in its private bank business, Commonwealth Private, and have in turn looked to move some retail clients into wholesale products.

A person familiar to the matter told Money Management that retail clients of the bank with over $2.5 million were being moved to wholesale products and were being asked to acquire a sign-off from an accountant for a wholesale investor certificate, even though he believed some of the clients were not sophisticated investors.

He said he believed the bank was changing products around and are trying to keep retail clients by moving them under the umbrella of wholesale clients so they could continue working with them.

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“This totally circumvents Standard 1 of the Code of Ethics,” he claimed. “It also breaches best interests duty because they’re putting the bank’s interest ahead of the clients.”

Money Management has obtained a copy of communications sent to clients signed off by Commonwealth Private’s executive general manager, Marianne Perkovic which notes: “some changes within our advisory team, and I wanted to assure you we have a very capable private wealth team continuing to support your needs”.

Money Management understands that a number of advisers have decided to leave the firm off the back of the changes.

“As we continue to growth our business, we will recruit a number of private wealth managers with the experience and capability to service you and your family,” the communications said.

“This team will be led by Kate O’Callaghan, who joined Commonwealth Private from JBWere this week. Kate has more than 20 years’ experience in advice and investments.”

Perkovic was unavailable for an interview with Money Management but Commonwealth Bank provided a statement that said: “As part of becoming a simpler, better bank for our customers, Commonwealth Private has positioned it’s advisory offering to best suit the needs of high net worth clients.

“We will continue to offer financial advice to Australian-based clients with complex advisory and investment needs under wholesale advice arrangements.

“We are currently working with existing Commonwealth Private retail clients to determine the best options for their advisory needs.  Within CBA, Commonwealth Financial Planning continues to offer retail financial advice to thousands of customers right across Australia.”

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Come on ASIC. You crucified Dover and all the ex Dover advisers who were all wrongly tarred with the same brush.. Grow a pair and take on one of the big competitors who constantly pick up the goal posts and move them or take them to another ground to play on. This is just cherry picking the high end of town and removing the client protection for them whilst abandoning everyone else.

This happens all the time. The wholesale investor exemption is a misnomer. I have plenty of clients over those thresholds who could not be considered sophisticated. The banks have been out flogging them 500K worth of hybrid notes in one sitting, better than term deposits is the spiel, and no SOA, no nothing. It needs to stop as well.

When is ASIC going to cancel CBA licence?

they can't. the cba holds everyone for ransom (they know it and are laughing in their executive washrooms patting each other on the back). so big it can't fail. so big, it doesn't obey the law. so big, it employs so many people, it has to continue in existence or the entire financial system comes undone.


ha ha, they just limp from one disaster to another. my god, what does it take for these people at cba fp and afterwards i will be lumped with more regulations

please read the following case :

Wingecarribee Shire Council v Lehman Brothers Australia (in liq) [2012] FCA 1028

oh no. BID (s961B) and appropriate advice (s961J) is their problem. I am worried about mine. I am now worried about a personal breach, and meeting my obligation under standard 12 of the FASEA COE. that's only 16 days away.

can people give me suggestions? i don't think a file note showing that i posted my concern here online is going to be adequate to hold "each other accountable" to protect the public interest.

how are others going to demonstrate, promote and realise standard 12. it's the LAW! (soon)

you were probably thinking s961G but wrote J.

ditto, don't know what i am going to do either. probably get banned by asic. this would constitute a bannable offence at least and the minimum is 3 years.

In every industry where one sector becomes chronically over regulated, consumers are inevitably attracted by cost and/or deception to the less regulated sectors of that industry. The end result is consumers are worse off. The original regulation program becomes self defeating if it focuses too heavily on one sector only, and completely ignores others.

In financial advice, reclassifying clients as "wholesale" is a classic example of a less regulated option that is making consumers worse off. So is TV/online promotion of junk insurance, investment property spruiking by real estate agents, SMSF spruiking by accountants, and super switching recommendations by call centres given as "general" advice.

Much of the growth in these sectors is a response to chronic overregulation of licensed advisers that is making it too hard for consumers to access affordable, professional advice. Over regulation is pushing consumers into far more risky options.

that's all great. i am just worried about not losing my house over comm bank jamming more people into their wholesale products. what did i prevent this from happening ? how did i meet standard 12?

i haven't done anything other than to post on this forum. ( i am very unhappy by the way about their conduct). and i am worried i will lose my house because i did not meet the obligations in standard 12, to hold them accountable.

and somehow or another ASIC will pin their misconduct ion me. I have to demonstrate how i complied with standard 12, it's the law.

give me some tips. the broader implications of over regulation is not my problem to solve (don't get me wrong, i care, but no one listens to me).

i just don't want to be homeless.

In reality, the Govt should reduce the definition of wholesale investors down to $1 million in total assets. Problem solved.

Proud member of the FPA 's professional partner program? "helping to drive the future direction of advice in Australia"

How good is Comm Private? Manages to break two FASEA code requirements in a single announcement (1 and 12 for those playing at home), annoy some hard-working advisers and remove safeguards from some pretty unsophisticated (although rich) clients.

It's a good thing Marianne has Royal Commission appearance experience - she's going to need it.

They started doing this at Westpac 2years ago where they encouraged bankers to flog capital notes and SMSF products to retail clients while encouraging those clients to get certificates saying they were wholesale clients from their accountants

I'm surprised, nee shocked, that Ms Perkovic still has a position that could actually be in a position to dictate changes of any sought within CBA. Her 'abilities' were put on show during the RC for all to see. No doubt her superiors must highly value her expertise in grovelling apology giving!

No doubt Ms Perkovic has been teflon coated since her days with Mr Lambert at Count. Put it this way, if that was a bloke after the RC hearing, he would have been cut by CBA/CFS over 12 months ago.

Not surprising nor unexpected. So far all the damage undertaken in the self employed business side. Just a slight annoyance with the big groups. Looks like they will get away with it again. Any idea what is the criteria, qualifications and CPD to be an untoucable no accountability qualifier. The public will take the bait hook line and sinker, only once when it is too late and they have destroyed small business owners will they realise they will be told what they are getting - no choice

Marianne "I charge dead people"strikes again! Acting as always in the banks interest without giving the clients a second thought. The excuse, we want to be a better, simpler bank. This morally bankrupt company should be shut down. How's that for simple and better.

yes, the deceased estate lawyers want all the fees (from dead people) all to themselves.

ACTUALY this is probably no longer a issue as the FASEA FG002Financial Planners and Advisers
Code of Ethics 2019 Guidance , page 12, shows a example where a adviser can not avoid the best interest duty & code ethics by using the asset/income tests to claim he was advising a "wholesale" level client and didn't have to meet the code, etc. see page 3 of the new ethics code it does note that a higher than law standard is now required with client interactions ( retail/wholesale same) Quote ".This Code imposes ethical duties that go above the requirements in the law. It is designed to encourage higher standards of behaviour and professionalism in the financial services industry."

dead issue now, new Ethics code applies to both wholesale & retail..Read code -page 3 states "This Code imposes ethical duties that go above the requirements in the law. It is designed to encourage higher standards of behaviour and professionalism in the financial services industry.'" also example 2 page 11 re wholesale investors in FASEA rRG002 Financial Planners and Advisers
Code of Ethics 2019

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