CBA's financial advice remediation program picks up the pace
Commonwealth Bank has offered a total of A$2.9 million in compensation to 171 customers and former customers of its financial planning businesses who received poor advice.In the latest independent expert's report on CBA's Open Advice Review Program, Promontory Financial Group said there had been a "marked acceleration" of the program during the December quarter, with 1251 assessments out of a total of 1937 assessment outcomes issued during the quarter.The Open Advice Review Program is a review and remediation program designed to identify poor financial advice provided by customers of Commonwealth Financial Planning and Financial Wisdom, covering the period between September 2003 and July 2012.By the end of last year the program had received 23,221 expressions of interest, with 9346 of these formally registered for the program. Of the 1937 assessments outcomes, in 1684 cases the bank's assessment was that the advice was appropriate and in 268 cases the bank found no evidence of advice being offered during the review period.There were 54 cases where the bank accepted that the advice was poor or incorrectly implemented but no financial loss occurred as a result.The 171 offers of compensation include cases where the advice was poor or incorrectly implemented and the client suffered loss, or where the advice was appropriate but incorrect fees were charged.Seventeen of the compensation offers have been rejected and counter-offers made to the bank. Two customers have taken complaints to the Financial Ombudsman Service. No case has ended up in a legal claim.CBA has 540 people working on the program - down from a peak of 613 in August. With the completion much of the file retrieval activity (970,000 hard-copy advice files have been catalogued), the bank has reduced the number of staff involved in the program's information management stream.One problem the bank faces is that there are more than 1000 cases registered where there is no available advice file. The bank has has to develop alternative approaches to dealing with these cases, such as interviewing customers to gather information and using data analytics on transaction data.Promontory said that, based on its review of a sample of cases, the bank was applying the program's processes "in a manner that is materially consistent with the programs objectives." There were a few exceptions but "none of these represented serious or intentional failings."