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.
“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.”
