The Australian financial regulator reported on latest developments around a poor advice episode involving Commonwealth Bank's wealth arms.

Commonwealth Bank is to contact around 2,740 clients to offer them up to A$5,000 each to have advice reviewed in the wake of a saga around poor advice at two of its businesses, Australia’s financial watchdog has announced.

The Australian Securities and Investments Commission yesterday announced release of a report on past activities by Commonwealth Financial Planning (CFPL)and Financial Wisdom Limited (FWL) for clients over poor advice. The report, ASIC said, confirmed inconsistencies and defects in the original A$52 million compensation package for clients. These failings led ASIC to impose new licence conditions on CFP and FWL last year.

The report was issued by KordaMentha Forensic and it will carry out a second report for ASIC into whether CFPL and FWL had a reasonable basis for identifying clients and advisors for the original compensation scheme.

The saga has been one of the most high-profile cases of poor advice – and controversy over how this was handled – in recent Australian financial history.

A third report by KordaMentha Forensic third report will assess what the firms are doing to rectify their practices and comply with conditions of their licences.

The report into the firms also showed that 86 clients under Project Hartnett [compensation scheme] did not receive the A$5,000 offer, and some clients did not receive an “Initial Letter” explaining that their advice was being reviewed.

CBA has given a commitment to ASIC that these clients will now be treated consistently with other clients under the licence conditions, including the A$5000 offer, ASIC added.