CBA blunders anew in planning

Commonwealth Bank failed to conduct a compensation program for financial planning clients in a manner consistent with its own plans, an ASIC report by KordaMentha Forensic has found.

CBA's reputation strife thus relates not only to past weakness but to recent management effectiveness.

Two CBA advice entities are caught up in this ASIC work: Commonwealth Financial Planning Limited and Financial Wisdom Limited

The licensees will contact approximately 2740 clients offering them up to A$5000 to have their financial advice independently reviewed and the other options available under the licence conditions, ASIC said.

"The licensees will also write to a further 1590 clients informing them that a review of their file found no evidence that they had received advice, but if that is not correct, the clients will be offered $5000 assistance and all the options available under the licence conditions."

ASIC said KordaMentha Forensic's work in preparation for this report also showed that 86 clients did not receive the $5000 offer, and some clients did not receive an 'Initial Letter' explaining that their advice was being reviewed.

CBA gave a commitment to ASIC that these clients will now be treated consistently with other clients, including the $5000 offer.

The ASIC overview is littered with language that points to repeat failures at Commonwealth Bank.

Most clients assessed in one compensation program "did not receive" a key letter.

Moreover, "no clients were given [a discretionary] offer."

"While some clients received a letter offering compensation or advising they were not entitled to compensation, most clients reviewed received no such communication," ASIC said

"As a result they were not given an opportunity to participate in the review and decision making processes as to whether they were entitled to compensation," it concluded.