CBA review meanders toward finale
Commonwealth Bank is reaching milestones on its Open Advice Review program at a sedate pace. Put in place more than two years ago to "identify and compensate for poor financial advice" the review program has racked up a compensation bill of less than A$10 million, a fraction of the staff cost to work it all out.The bank released the sixth periodical report on the program on Friday, prepared by Promontory Financial Group Australasia, the bank's consultant on mitigation of Commonwealth Bank's variant of the "conduct" issues central to current and recent controversies in the industry.In CBA's case the review program considered "poor financial advice that may have been provided to customers of Commonwealth Financial Planning and Financial Wisdom Limited between 1 September 2003 and 1 July 2012."The negligible level of compensation paid to affected clients of the bank's financial planners was a feature of the past five reports by CBA and Promontory.Payouts accelerated over the four-month period from 1 May 2016 to 31 August 2016 covered in the latest report.During those four months Commonwealth Bank offered compensation worth A$4.9 million, which the report summarises as "more than double the $2.3 million offered over the prior four-month period to 30 April 2016."This "marked increase in compensation," Promontory said, "reflected the ongoing increase in the number of cases with assessment outcomes issued, and the number of customers who have responded to those assessment outcomes."Total compensation offered by the program since its commencement was $9.8 million, Promontory said.Of the $9.8 million offered, CBA "had paid $6.7 million to 476 cases in the program."The remaining $3 million offered but not yet paid "related primarily to cases where the bank's assessment outcome was still under review "by either the customer or the bank," where CBA was considering counter-offers by customers.