The Commonwealth Bank has released the seventh and final independent report into its compensation scheme for victims of poor financial advice.
According to the final report from Promontory Financial Group, CBA has paid out $23 million to 1,641 cases of poor financial advice. This amount is despite the bank offering $29 million to victims.
The report states that 2,920 cases exited the program after not responding or rejecting the bank’s assessment outcome, while 62 lodged complaints with the Financial Ombudsman Service.
However, there were multiple challenges during the review, including scenarios where the bank could not produce sufficient documentation and evidence for particular cases, the report shows.
There were 10 cases that the independent overseer, Promontory, recognised as failing to adhere to the open advice review program’s documented processes and objectives.
This resulted in some customers receiving an incorrect assessment outcome or inaccurate offer of compensation and so offers of compensation were adjusted by the CBA following these findings.
Since commencing in July 2014, the compensation scheme has received 10,128 registrations from customers claiming to have received poor financial advice in the period between 1 September 2003 and 1 July 2012.
In 5,573 cases, CBA found no evidence of poor advice being provided or incorrect fees charged, the report stated. However, 1,076 cases were found to have involved poor advice that resulted in financial loss to the customer.
A further 542 cases were found to have involved poor advice that did not lead to financial loss to the customer and 434 cases were found to have involved incorrect charging of fees that did not cause financial loss to the customer, the report said. CBA is still assessing 936 cases.
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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