Australia's Commonwealth Bank Continues Moves To Resolve Poor Advice Episode

Tom Burroughes

17 November 2014

Australia’s , which has been moving to recover from a saga over poor wealth management advice, has said it “acknowledges” the appointment of KordaMentha Forensic as the compliance expert as part of conditions set out under financial licence terms.

The appointment of KordaMentha Forensic comes under the “varied Australian Financial Services Licence conditions for its financial planning arms, Commonwealth Financial Planning Limited (CFPL) and Financial Wisdom Limited (FWL)”, the bank said in a statement.

The bank has unveiled a number of steps it is taking to deal with the controversy over its past wealth management advice. To view more on this subject, click here.

The licence conditions were agreed with the Australian Securities and Investments Commission, the country’s financial regulator, in May 2014 and were finalised in August.

Under the variations, CFPL and FWL will contact more than 4,000 of their financial planning customers to inform them the advice they previously received was subject to an internal review as CFPL and FWL had identified that their advisor had provided poor advice to some customers in the past, the statement said.

KordaMentha Forensic’s role will involve preparing three reports for ASIC, it continued.

Following the delivery of the first report by KordaMentha Forensic, CFPL and FWL will start contacting customers. Customers contacted will be given the choice to have their assessment reviewed, and the opportunity to seek independent advice via a qualified advisor (ie a lawyer, accountant or licensed financial adviser), with fees up to $5,000 being met by the Group. Customers who will be contacted are also eligible to take part in the Open Advice Review programme, which was announced by Commonwealth Bank on 3 July this year.