In August 2014, ASIC imposed additional licensing conditions on both Commonwealth Financial Planning and Financial Wisdom to ensure clients whose advice was reviewed by the AFSLs under past remediation programs were given access to legal or financial advice as well as a further, independent review.
Independent compliance expert KordaMentha Forensic was also appointed to review the advice given by the licensees’ advisers to identify “high risk advisers and affected customers”.
The most recent round saw all the advice provided by five of its licensees’ advisers reviewed, and in its latest update on the program ASIC said the total compensation due to these clients is approximately $1.9 million – though this figure is likely to grow.
“Compensation is likely to increase as CBA reviews further customer files,” the regulator said in a statement.
This figure is in addition to the $4.97 million already offered to the clients of other advisers being examined in the review.
According to ASIC, the bank has written to 3,500 clients of the five advisers to offer further reviews of the advice they received, and issued 1,000 outcome letters to clients whose advice has been reviewed.
“Commonwealth Bank will continue to issue assessment outcome letters and compensation offers to affected customers between now and 31 March 2018,” ASIC said.
In a response to the update, the Commonwealth Bank noted it has “previously contacted more than 4,300 customers to offer independent reviews of the advice they had received” and is presently ahead of the remediation schedule agreed to with ASIC.
“The report issued today confirms that the licensees correctly identified that customers of five advisers should be included in a compensation program,” the bank said.
“All customers have been contacted to advise them that CBA is conducting a review of their advice, and the vast majority of assessment outcomes will be issued to customers by the end of January 2018.”
